Bank of China moves closer to LME membership
By Eric Onstad
LONDON (Reuters) - Bank of China International (BOCI) is on track to become the first Chinese member of the London Metals Exchange - giving the bourse a boost while it is considering possible takeover bids - following authorization by the UK financial regulator.
The addition of a Chinese member to the world's biggest metals market is expected to increase trading volumes, which would increase the LME's attraction as a takeover target. China is by far the world's largest consumer of metals and other industrial raw materials.
The 130-year-old metals bourse said on Friday it had received a "good number" of first-round bids ahead of an LME board meeting on February 23.
BOCI, the investment banking subsidiary of the Bank of China Ltd 601988.SS (3988.HK: Quote), one of the country's top four banks, has gained approval by the UK Financial Services Authority for its global commodities unit in recent weeks, according to the FSA Register.
FSA authorization is a necessary step for BOCI's application for category two LME membership, which would give it access to all types of exchange business except ring trading.
The bank still needs approvals by the LME and clearing house
LCH.Clearnet and also must purchase LME shares before it can begin trading.
BOCI's London office was not immediately available to comment, and the LME declined to comment, but an industry source said the bank was expected to get LME approval by April. Continued...