SINGAPORE Garry Jones, the former head of NYSE Liffe, has been named the new chief executive officer of the London Metal Exchange, replacing Martin Abbott.
Diarmuid OHegarty, the LMEs deputy chief executive officer and a candidate for the top job, has submitted his resignation, according to the LME and owner Hong Kong Exchanges & Clearing Ltd. (HKEx).
Jones, who left NYSE Liffe in 2012, is expected to start in his new role Sept. 30, HKEx and LME said.
Challenges facing Jones include steering the LME through changes to its under-fire warehousing regime and ensuring the LME is better placed to grow its Chinese business.
"They have deliberately chosen someone totally detached from whats happening in the market, and this (appointment) helps wipe the slate clean with the warehousing queues and other issues," one market analyst told AMM sister publication Metal Bulletin.
Other market participants believe that the new head of the LME doesnt need to have a base metals background to be successful.
"I think its going to be a different exchange, so it doesnt have to be someone with a base metals background, and the new guy should lead the exchange to the next level," a senior broker in Asia said.
It is important that the new chief executive officer not have any link to the warehousing problems and related lawsuits against the LME, a physical metals trader in Asia said.
"Garry has deep experience from both NYSE Liffe and ICAP of leading complex businesses and has been at the heart of some of the most transformative developments in the exchange sector," HKEx chief executive officer Charles Li said in a statement. "We started our search process looking for a leader of the LME but I am convinced that we have succeeded in attracting someone who will also help to shape the direction of the entire HKEx Group."
Jones appointment and the impending departure of OHegarty, who joined the LME in 1998 and has been deputy chief executive officer since 2012, complete a change of the guard at the top of the LME.
"The real news is OHegartys departurethis says theres going to be a big change in the guard and a change in direction of the LME," the market analyst said.
"Losing someone like him with inner knowledge of the workings of LME is a big blow," he added, saying that the exchange was probably willing to take that chance as they look to clear up the warehousing problems.
OHegarty will step down formally in six months.
"This change in personnel is to tackle the next phase of growth at the LME," the market analyst said, adding "they have Bonnie (Liu) and they need to push for (strength in) China."
HKEx hired Liu in June as vice president for Asia commodities to grow its business in mainland China (amm.com, June 11). HKEx has also reshuffled its Asia staff between its Hong Kong and Singapore offices.
A version of this article was first published in AMM sister publication Metal Bulletin.