HONG KONG (Reuters) - The new head of the London Metal Exchange on Wednesday said he was pleased with the level of early responses to a paper released last month discussing plans to reform parts of the bourse to fight sliding volumes.
The 57-page document included proposals to change the structure of the exchange’s contracts and fees, as well as allowing metal to be used as collateral for margin trading.
“We know that these are controversial topics,” Matthew Chamberlain said on the sidelines of the LMEWeek Asia conference in Hong Kong.
“On many of them, we have heard views from one end of the spectrum to the other. That’s what we expected ... I personally am very pleased as to the level of engagement.”
A perceived lack of strategy and falling volumes led to the departure of CEO Garry Jones early this year.
The LME dominates the trading of metals such as aluminium, copper and zinc, but incursions into its territory from rivals such as the Shanghai Futures Exchange (ShFE) and CME Group (CME.O) have seen its share of overall copper trading fall to nearly 60 percent from 80 percent in 2008.
The paper also included a list of products the LME is aiming to launch such as platinum and palladium futures contracts that would be added to its LMEprecious platform due to start in July.
“From what I hear, the most positive feedback around the new initiatives is for example on the physical platform - I think there is very strong buy in for that and precious,” said Chamberlain.
The head of Hong Kong Exchanges and Clearing (HKEx) (0388.HK) earlier in the day rebuffed criticism of the bourse’s handling of the LME.
In his first speech since a management reshuffle last month, Charles Li reinforced his message that a major overhaul was needed at the LME when the Hong Kong bourse bought it five years ago, but acknowledged that upset among physical users had hurt turnover.
Reporting by Melanie Burton; Editing by Joseph Radford