The London Metal Exchange (LME) has insourced 100 IT staff after cancelling its £25 million a year contract with service provider Xchanging.
Under the new agreement, the outsourced staff will be transferred to LME, where they will provide in-house support for the exchange firm’s technology operations, such as its transactions systems. They will also continue development of its new commodities clearing platform, LME Clear, to be launched later this year, under the leadership of CTO Robin Paine.
It is hoped that in-sourcing staff will enable better alignment between the LME and the Hong Kong business, following the $2.2 billion buyout by Hong Kong Exchanges and Clearing (HKEx) in December 2012.
“We are very pleased to welcome the IT team to our business,” said Garry Jones, LME CEO. “Our decision to bring technology in-house is an indication not only of the growth of the business over the past few years but also of our future development as we strengthen and enhance our technology offering.”
The IT workers had previously been employed as part of an outsourced contract with Xchanging, which has provided technology infrastructures services to LME since 2005.
In January 2012, Xchanging was awarded a three-year contract renewal by LME worth a total of £75 million, with the option of a further two-year extension. However Xchanging announced in April 2013 that its contract with LME would be terminated following a contract review in the wake of HKEx deal.
Speaking to ComputerworldUK last year, Xchanging labelled the decision ‘disappointing’.
"We have done fantastic things for them over the years. It is all rather disappointing, but that is life when there is a change of ownership,” a spokesperson said. “It is not a UK business [taking over LME], it is someone in another geography who may not be close to us and the services we provided for the London Metal Exchange."
LME, which has a number of other outsourcing arrangements, will continue to partner with Xchanging for certain projects, though with a ‘reduced scope’.
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