Published by Jessica Weisman-Pitts
Posted on October 25, 2024
By Pratima Desai and Julian Luk
LONDON (Reuters) – U.S. broker Clear Street, which is seeking membership of the London Metal Exchange’s (LME) open outcry trading floor, has poached three metal traders from Sigma Broking, two sources familiar with the matter said.
A unit of the broker, Clear Street Futures headed by Chris Smith, is planning a major expansion in LME metals trading, one of the sources said. Smith was previously the London-based global CEO at ED&F Man Capital Markets, acquired in 2022 by Marex, another LME broker.
Chris has been a presence in metals trading for a long time,” the second source said. “Starting a metals trading operation, any trading operation, is a major undertaking.”
Two of the Sigma traders going to Clear Street Futures were previously at ED&F Man Capital Markets with Smith, the sources said.
Clear Street and Sigma did not respond to Reuters’ requests for comment.
Industry sources say Smith is also in the process of hiring sales staff and will be looking to hire operations people.
Clear Street’s plan for floor trading or Category 1 membership of the LME would take the number of dealing members on Europe’s last open-outcry venue back to eight after Societe Generale said in August it would leave the floor.
The 147-year-old LME owned by Hong Kong Exchanges and Clearing, proposed closing the floor or ring trading three years ago, to join other exchanges with only electronic trading, but opposition from the physical market persuaded the LME to row back on its plans.
Ring trading now operates on a hybrid basis. Open-outcry trading is used for determining official prices used by physical users as benchmarks for their contracts and an electronic system for closing prices.
UK-based Sigma Broking Limited became the first new LME floor member of the London Metal Exchange in 14 years in 2021. Gary Petitt, CEO of Sigma, was also at ED&F Man Capital Markets in the position of UK CEO.
After SocGen said it would no longer take part in LME floor trading, a Reuters survey showed that almost all the remaining firms remained committed to open-outcry trading, but Sigma declined to comment.
(Reporting by Pratima Desai and Julian Luk; additional reporting by Polina Devitt and Eric Onstad; Editing by Louise Heavens)
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