Sigma Broking Explores Sale, Exit from LME Floor Trading
Sigma Broking, a member of the London Metal Exchange's (LME) open-outcry trading floor, is reportedly in discussions to sell its business.
Joining the LME in 2022 as the first new floor trader in 15 years, Sigma's potential exit raises questions about the future of ring trading on the world's oldest and largest industrial metals market.
Sources familiar with the situation indicate that Sigma's motivations may include increased capital requirements from the LME's clearing house. The brokerage is said to have engaged advisors for the sale, which encompasses all its operations, including metals, equities, and fixed income in the US and Dubai. Six potential buyers are reportedly interested.
While Sigma's primary clients are investment funds, its business has reportedly faced recent challenges. Accounts show a post-tax loss for the 12 months ended May 2023.
The LME has previously stated that the floor will close if ring members fall below six or if trading volume drops below 75% of the 2022 level.
Despite these concerns, the floor received a boost in December with the addition of Clear Street Futures as a floor-trading member. The company acquired several metals traders from Sigma during its London expansion.
The LME, owned by Hong Kong Exchanges and Clearing Ltd., has declined to comment.