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LME chief Chamberlain steps down to move into cryptocurrencies

01/21/2022 | 09:30am EDT
Matt Chamberlain, CEO of the London Metal Exchange (LME), attends the LME Asia Week in Hong Kong

LONDON (Reuters) -London Metal Exchange (LME) Chief Executive Matt Chamberlain will step down in April, the exchange said on Friday, in a surprise move after five years at the helm of the world's largest market for industrial metals.

Chamberlain, a former banker who has been at the LME for nine years, has taken the top job at digital asset custody services provider Komainu, his new employer said.

Komainu, launched in 2020, is a joint venture between Japanese bank Nomura Holdings, digital asset security firm  Ledger and digital asset investment house  CoinShares. It safeguards about $5 billion in bitcoins and other cryptocurrency assets on behalf of financial institutions.

While at the LME Chamberlain initiated many changes, including boosting the role of electronic trading to increase flagging volumes.

Last year he proposed closing the exchange's open-outcry trading floor, the last such venue in Europe, causing a backlash among some members which resulted in a compromise to keep it open.

Chamberlain, 40, also led sweeping reforms aimed at eliminating logjams in warehouses that collect rent for storing metal and launching new contracts for metals used in electric vehicles.

"We thought Matt was in for the long haul. They need to do something about volumes," a metal industry source said.

The 145-year-old LME reopened its physical trading ring in September after the pandemic forced its closure in 2020. It adopted a hybrid system with open outcry used for official prices and its electronic system for closing values.

Adrian Farnham, currently head of LME Clear, will take over as interim CEO in May, while a permanent replacement for Chamberlain is sought, the exchange said in statement.

Farnham, who worked at Morgan Stanley for 13 years and was appointed chief executive of the LME's clearing house in 2016, has more than 30 years of experience in financial markets and market infrastructure, the LME, which was bought by Hong Kong Exchanges and Clearing (HKEx) in 2012, said.

LME trading activity has been on a downward trajectory for years due to competition from COMEX and the Shanghai Futures Exchange, falling 6% last year.

"If they try to get rid of the date structure, they will have nothing that differentiates them from the CME. LME can't compete with the CME where financial players are concerned," the industry source said.

The LME's date structure offers standard one- and three-month contracts, but users can also trade daily out to three months and forwards are available for those who want to trade for several months or two to three years down the line.

Standardised monthly futures on the CME allow funds and traders to settle a trade as soon as it is closed, while settlement on LME takes place every third Wednesday.

(Reporting by Zandi Shabalala; additional reporting by Pratima Desai;Editing by David Goodman, Kirsten Donovan and David Evans)

By Zandi Shabalala

© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
NOMURA CO., LTD. 1.70% 898 Delayed Quote.-5.77%
NOMURA HOLDINGS, INC. 1.44% 501 Delayed Quote.-0.14%
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