Metal Exchange sets 2014 launch date

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The London Metal Exchange (LME) is on track to launch its own clearing arm by the first quarter of 2014 and will look into financing the project without drawing on members’ money, an official at the exchange said.

The LME said in December it had decided to create a clearing service, in a move that could make the 130-year-old exchange more attractive ahead of a potential sale.

Trades at the LME, the world’s largest industrial metals exchange, are currently cleared through LCH.Clearnet, Europe’s largest independent clearing house.

“We expect to launch by the first quarter of 2014,” said Trevor Spanner, managing director of post-trade services at the LME.

“Over the next six months we will spend time on getting the system up and running, selecting the technology vendors and engaging with the LME members and regulators.”

Mr Spanner, who was hired in September to spearhead the exchange’s feasibility study into self-clearing, said the project could be financed in a “number of ways” including through “loan and/or equity from the LME”.

“We have a robust business case that includes the cost of financing the clearing house ... We are comfortable at this stage there will not be a call on members’ money,” he said.

The LME announced in September that it had received takeover approaches.

At least 15 suitors have expressed interest in the world’s biggest market place, according to industry sources.

Bids are due to be in by around mid-February.