LME chair to step down, exchange declines comment on reason

Gay Huey Evans, chairman of the LME. Credit: Aurubis AG via Twitter

The London Metal Exchange (LME) on Thursday said Gay Huey Evans will step down as LME chair, but declined to comment on whether it was due to regulatory reviews into the nickel market events in March.

The Bank of England and the Financial Conduct Authority in April launched a sweeping probe into how the LME suspended chaotic nickel trading on March 8 after prices doubled to a record above $100,000 a tonne in a few hours.

Related: The 18 minutes of trading chaos that broke the nickel market

Regulators said the episode underlined questions about the transparency of the 145-year-old LME and they would determine if further action should be taken.

The FCA is looking into how the exchange handled the situation while the BoE is looking into the LME’s clearing house.

The LME and BoE declined to comment when asked by Reuters if Evans was stepping down because of the regulatory reviews, while the FCA said: “It’s a question for the LME, not for us.”

The exchange in June appointed management consultants Oliver Wyman for an independent review of the March incident. It is due to be published soon.

Subject to regulatory approval Martin Fraenkel and Pierre Vareille will be appointed to the board of directors, the exchange said.

Fraenkel was most recently president of S&P Global Platts and Vareille was formerly chief executive of Constellium, a manufacturer of aluminum products. Both will join the board in the first quarter.

The board has started the search for a new chair, the LME said.

The LME is grappling with declining volumes, particularly in nickel, after the trading fiasco in March.

The exchange annulled all nickel trades agreed on March 8, for which it is facing legal action, and suspended the market for the first time since 1988.

The LME is owned by Hong Kong Exchanges and Clearing (HKEX).

(By Pratima Desai; Editing by David Evans and Mark Porter)


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