London Metal Exchange chief executive to step down

Garry Jones has stepped down as chief executive of the London Metal Exchange, the second senior manager to leave the world’s centre for metals trading in two months.

The LME said Mr Jones “retired” on Monday after just over three years running the exchange, which is owned by Hong Kong Exchanges and Clearing. Matthew Chamberlain, the LME’s chief operating officer, has been appointed interim chief executive, with immediate effect.

Mr Jones pursued a modernisation programme for the 139-year-old LME that sought to make it a more commercial business, but this created tensions with the tight-knit community of brokers and traders who work on the exchange and previously owned it.

He was appointed chief executive after the LME was bought by HKEx for $2.2bn in 2012, but his move to raise fees angered some brokers and traders, and the exchange also struggled to expand into mainland China, the world’s largest consumer of metals.

Over the past year trading volumes have been falling while those of its competitors, the CME Group in the US and Shanghai Futures Exchange in China, have risen. Volumes on the LME fell by 7.7 per cent last year compared to 2015.

The tensions between Mr Jones and some LME member firms came to a head after the exchange raised trading fees by 34 per cent in 2015. The LME also sought to boost volumes by seeking out electronic and speculative traders.

In a climbdown last August, the LME slashed certain fees after some of its brokers considered setting up a rival exchange.

“We thank Garry for the contributions he has made to the transformation of the LME over the past few years and we wish him the best in his new endeavours,” said Charles Li, chief executive of HKEx, on Monday.

In December, the LME announced that Stuart Sloan, its chief operating officer, would leave. It did not give a reason for his departure.

The row over LME fees persisted late last year. In November Michael Farmer, a hedge fund trader and LME veteran, described the cost of trading on the exchange as “prohibitive”.

Mr Li responded by calling on the LME’s members not to “rock the boat”.

Meanwhile, the LME has made little progress in expanding in mainland China. After years of frustration, HKEx in 2016 decided to build a spot commodities platform in the southern Chinese city of Shenzhen, just across the border from Hong Kong.

During Mr Jones’ tenure the LME cracked down on excessive queues to withdraw metal from warehouses.

The queues had pitted warehouse owners against users of metal such as Coca-Cola and General Motors.

Mr Jones earned £1.7m in compensation in 2015, including salary and bonus.

He is a former chief executive of NYSE Liffe, and spent much of his career as a derivatives trader.