October 20, 2014 / 8:07 AM / 3 years ago

LMEWEEK-LME to offer more electronic liquidity on monthly dates

LONDON, Oct 20 (Reuters) - The London Metal Exchange (LME) plans to offer more liquidity on on its electronic platform to attract more investment from speculators and funds, a top official said on Monday.

The world’s biggest and oldest industrial metals market will soon release proposals about adding liquidity on the so-called “Third Wednesday” contract expiration dates, Matthew Chamberlain, head of business development, told a seminar at the start of LME Week.

“We will shortly be going out to the market with a comprehensive discussion paper around market liquidity and in particular delivering enhanced electronic liquidity on LME Select,” he said.

Mining companies and industrial users love the structure on the 137-year-old exchange that allows them to hedge physical metal on any day during a three month period, but fund mangers prefer a single date that has more liquidity.

“In order to facilitate better access to the market we are investing in risk management solutions for our electronic platform whereby we can work together with our members to offer more direct client access with traders and market makers into the LME’s orderbook,” Chamberlain said. (Reporting by Eric Onstad)

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