The head of the London Metal Exchange has decided to stay in the role, backtracking on plans to join a digital assets start-up as the 145-year-old City institution seeks to repair a reputation damaged by recent chaos in the nickel market.
Matthew Chamberlain, chief executive, said the events of recent weeks had brought into focus the importance of the LME and the metals markets. His U-turn comes amid a broader shake-up of senior management at the exchange, where brokers and industrial traders have gathered to buy and sell copper, zinc and other industrial metals since 1877.
“I want to continue to work with the team on supporting the long-term health and efficiency of the market and drive forward the sustainable development of our industry,” he said in a statement.
The LME was plunged into crisis last month after Russia’s invasion of Ukraine sparked fears about supply shortages and squeezed the position of Chinese metals tycoon Xiang Guangda, who had made a huge bet on falling prices.
Prices spiked 250 per cent in days, forcing the LME to suspend trading and cancel billions of dollars in trades over concerns that some of its smaller members had been pushed to the brink of failure by the size of the move.
But the decision to erase a day of trading sparked fury among other customers who lost out, and the IMF warned this month that governance at the exchange needed to be strengthened to address conflicts of interest.
The LME, which has denied that parent company Hong Kong Exchanges and Clearing influenced its decision, is looking for at least two independent non-executive directors to join its board.
It has launched an independent review into the March chaos while UK regulators are running separate investigations to determine “what lessons might be learned”. Chamberlain has said off-exchange trading was so large and unreported that the LME facilitated only a fifth of the market.
Chamberlain, a former banker instrumental in selling the LME to HKEX in 2013, has led it since 2017 but has been frustrated in his efforts to reform an exchange that runs the last in-person trading floor in Europe. A plan to close the LME’s distinctive Ring trading floor with its distinctive red sofas was shelved after brokers and industrial traders resisted switching to a fully electronic market.
He had been due to leave the LME on Friday to join Komainu, a digital assets custody business backed by Nomura and billionaire hedge fund manager Alan Howard.
But after a recent approach from the board, he decided to change his mind and accept a new contract. His first task will be to launch an independent review of recent events in the nickel market, which may eventually provide the leverage needed to modernise parts of the LME’s complex market structure.
Komainu said the plans not to proceed had been mutual. “We part ways amicably and wish Chamberlain the best as he continues on in his role as the chief executive of the London Metal Exchange,” said Henson Orser, acting chief executive of Komainu.
Adrian Farnham, head of the LME’s clearing house, had been set to take over as a temporary chief while the bourse searched for a replacement. However, the LME said on Wednesday that Farnham would instead proceed with his planned retirement, while chief financial officer Catherine Lester would not return after a leave of absence that predates the nickel scandal.
“I’m very pleased that Matt has decided to stay. He leads from the front, exemplified by his handling of the unprecedented developments in the nickel market in the past few weeks,” said Nicolas Aguzin, chief executive of HKEX.