The London Metal Exchange (LME) has opened its first clearing house, LME Clear, running on Swedish supplier Cinnober’s TradExpress real-time processing technology.
The launch of the platform, named LMEmercury, follows a three-year project by the LME to create its own risk management and multi-asset clearing services, migrating its users from LCH.Clearnet.
The LMEmercury system is built on Cinnober’s TradExpress RealTime Clearing solution, providing real-time risk assessments, straight-through-processing of payments, ad hoc stress testing and treasury management.
LME already uses other modules of Java-based TradeExpress, including for its electronic trading platform LMEselect, and has partnered with Cinnober for the last decade.
“In today’s clearing environment, regulatory, market and client demands emphasise the need for high-performance systems, in terms of resilience, processing ability and the move to real-time risk management," said Trevor Spanner, LME Clear chief executive. "Our partnership with Cinnober has enabled us to deliver this capability."
In 2013, the company appointed former London Stock Exchange CTO Robin Paine to lead development of technology, including the creation of LME Clear.
Earlier this year, LME announced it had insourced 100 IT staff to support technology operations and assist development of the clearing system, after cancelling its £25 million a year contract with service provider Xchanging.
Since being acquired by Hong Kong Exchanges and Clearing in a £1.4bn takeover18 months ago, the LME has also aimed to improve its trading technology, revealing plans to invest £1 million in new infrastructure and software to help modernise its ‘open-outcry’ trading floor.