The London Metal Exchange has presented an “open door” to competition by increasing trading fees, a challenger has claimed.
NFEX Markets is to start trading in base metals on a digital platform next year. The platform has been designed by Autilla, a start-up.
Mike Greenacre, chief executive of Autilla, said that NFEX was aimed at over-the-counter contracts that had been priced out of the LME market. Such transactions are non-standard and are carried out between buyers and sellers rather than through an exchange. “The LME has opened the door, so we’re happy to step through it”, he said.
The LME raised fees for over-the-counter transactions by 34 per cent in 2015. It has proposed rebalancing fees between different types of trades in a recent discussion paper. “LME volumes, while impacted by a number of factors, have undoubtedly been affected by higher fees,” the discussion paper said. The LME declined to comment.
Mr Greenacre said he believed that “open outcry” trading, left, was on the way out at the LME.