LONDON Feb 17 The London Metal Exchange (LME)
will expand direct access to data feeds from its electronic
trading system, aiming to boost computer-driven trading, the
exchange said on Monday.
High-frequency trading on financial markets has spurred
controversy and has been blamed for volatile market moves, such
as the plunge in shares on Wall Street in 2010, known as the
"flash crash". Supporters of such trading say it adds liquidity
The European Union agreed last month on new curbs on
high-speed trading to be implemented by the end of 2016.
Starting on March 24, clients of LME members will be able to
plug into a data feed from the LMEselect electronic trading
system instead of having to go through third parties, a
The LME, the world's biggest marketplace for industrial
metals trading, is owned by Hong Kong Exchanges and Clearing Ltd
"The new policy is of particular interest to members'
clients pursuing an algorithmic trading strategy, as they can
now trade with the benefit of lower-latency data access," it
Algorithmic traders use sophisticated computer programmes to
control trading decisions and split-second timing can be key to
their strategies. A lower-latency network connection boosts
speeds and cuts delays.
"The provision of data directly to LME member clients will
allow market participants to deploy a broader range of trading
strategies on LMEselect, adding liquidity to the orderbook to
the benefit of all market users," Matthew Chamberlain, head of
business development at the LME, said in the statement.
The direct access will only apply to data - placing orders
will still require going through third parties for non-LME
"The LME continues to investigate potential DMA (direct
market access) approaches (for trading), but will only implement
a DMA solution if it will bring incremental liquidity to the
market, with consequent benefits for existing members and their
clients," the LME said.
In 2013, 171 million lots were traded on the LME, the
equivalent of 4 billion tonnes and $14.6 trillion in notional
(Reporting by Eric Onstad; Editing by Mark Potter)