Dear HKex: About those fees...

As LME brokers prepare for the planned rise in London Metal Exchange transaction fees, Metal Bulletin imagines what a category I broker might be saying.

Dear Sir, I’m writing in response to the planned rise in London Metal Exchange transaction fees. As a category I broker and former shareholder in the LME, I happily admit we made decent money on our shares when Hong Kong Exchanges & Clearing bought the exchange a couple of years ago. Obviously and rightly so, HKEx wants to claw back some of that £1.38 billion ($2.2 billion) it spent, plus recoup cash spent on projects like LME Clear. (Nice job, by the way; the rollout of the new clearing house was handled seamlessly). We also agree that the LME needs to continue to commercialise; as the exchange has said, the LME pre-acquisition would not survive in today's environment. But did the rise in fees – a whopping 34% all-in – have to be quite so huge? When SABMiller and Molson Coors Brewing C teamed up to form MillerCoors, I didn’t see the...

Published

Andrea Hotter

October 06, 2014

20:30 GMT

New York