Matthew Chamberlain of LME, London Metals Exchange
Matthew Chamberlain will be the youngest head of a major exchange

A former investment banker has been appointed as the new chief executive of the London Metal Exchange, the world’s oldest metals bourse, which is battling to halt a decline in trading.

Matthew Chamberlain, 35 and currently temporary head of the LME, would become its permanent chief executive, said Hong Kong Exchanges and Clearing, owner of the London bourse, on Friday.

He succeeds Garry Jones, who suddenly quit in January after clashing with brokers and struggling to increase trading at the 140-year-old LME.

Mr Chamberlain, who advised HKEx on its $2.2bn acquisition of the LME in 2012, is the youngest head of a major exchange and faces a big challenge in reviving his new organisation’s performance.

“Matthew’s experience and knowledge of the LME means that he is uniquely suited to lead the business in the next stage of its evolution,” said Charles Li, chief executive of HKEx.

Mr Chamberlain, who before joining the LME in November 2012 worked at UBS, Perella Weinberg and Citigroup, said: “I look forward to working closely with our members, clients and the broader metals community.”

The LME is the world’s leading metals exchange and dominates trading in commodities such as aluminium, copper and zinc. However, it is contending with fierce competition from rivals, including CME Group of the US and the Shanghai Futures Exchange.

Mr Chamberlain is set to issue a wide-ranging discussion paper about the future of the LME, including whether it should modernise itself to attract more of the world’s hedge funds, asset managers and algorithmic traders, according to people who have seen a draft of the document.

The LME currently operates the last open-outcry trading floor in Europe and has a unique structure that some investors find baffling.

But any step to reform it could alienate the mining companies and other industrial users of the exchange, a core group of customers that have long used it to hedge their exposure to metals prices.

Mr Chamberlain was head of European financial technology at UBS when he advised HKEx on the purchase of the LME. The deal was widely seen by analysts and other industry observers as expensive, but afterwards Mr Li had insisted that Mr Chamberlain join the LME, said people briefed on the move.

Mr Chamberlain won plaudits for pushing through a complicated reform of the LME’s much maligned warehousing system after buyers complained about long queues to access their metals.

He was appointed interim chief executive after Mr Jones left abruptly, following two years of falling trading activity on the bourse and disaffection among exchange members about fee increases.

Mr Jones’s departure has also followed warnings by the Financial Conduct Authority, the UK financial regulator, about shortcomings in the LME’s surveillance systems for analysing suspicious trades.

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