LONDON Brushing aside the
departure of senior executives in recent weeks, Newedge Group
SAs global head of fixed income, currency and commodities
said the brokerage is committed to its metal business, its
metal clients and the London Metal Exchange.
"We have the No. 1 metals
business in the world, with approximately an 18-percent share
of the LME market, and that is based on our platforms and our
people," John Fay told AMM sister publication
Fay and Michael Turek, senior
director on Newedges New York metals desk, were speaking
in the wake of the departures of global head of metals Mike
Frawleywho is set to join Jefferies Bache Securities
LLCand Joel Spier and John Peiser in New York, as well as
the resignations of Steve Pettitt and Mark Taylor in
"We have had a strong interest
in the senior positions that have been vacated and have begun
to interview for replacements, though we intend to take some
time to assess exactly what we need," said Fay, who assumed
direct responsibility for the metal team upon Frawleys
The developments that will
result from the Dodd-Frank Act in the United States,
liberalization in China and what Fay characterized as the
"electronification" of metal markets worldwide would likely
have necessitated some changes in any case, Fay added.
"Speaking as a front-line
soldier that does answer the phone, I must say that even though
people come and go, the bulk of our strong core global team has
remained," Turek said.
Volumes transacted through the
companys electronic platform Metalsedgeor CN-Pulse,
as it is known to clients of its joint venture with
Beijing-based partner Citic Group Co.and the
brokerages floor team on the LME have increased in recent
days, he said.
"Our goals havent changed:
to offer price-efficient liquidity to our clients through our
teams in New York and Hong Kong and our pre-eminent floor team
in London, which is still led by Andy Patterson," he said.
Fay dismissed suggestions that
Newedges ownership by two Paris-based
banksCrédit Agricole SA and Société
Générale SA, which are generally understood to be
facing some challenges as a result of the euro crisiswas
hindering its business.
"We have not seen any
significant attrition of our customers as a result of that,"
Fay said. "When customers say to me, You have net capital
of $2.2 billion on your balance sheet and JPMorgan has $11.4
billion, I respond by saying, That $2.2 billion is
basically just sitting there in a bank account to support
customer activity; we do not run a principal trading
In contrast to banks and some
other brokers, Fay added, Newedge does not take proprietary
risk. "Proprietary trading is a significant risk and our
clients appreciate the fact that we do not take it."
Newedge held $17.6 billion in
segregated accounts for clients on April 30, according to U.S.
Commodity Futures Trading Commission data, behind only Goldman
Sachs Group Inc. ($19.5 billion) and JPMorgan Securities LLC
"As you can see, were
fully committed to all our businesses, particularly metals, and
the fact that weve had a bit of staff turnover is neither
here nor there," he added.