LME CEO: UBS Still A Member; No Major Membership Change In 09

Swiss investment bank UBS AG (UBS) is still a member of the London Metal Exchange, Martin Abbott, CEO of the metal exchange said Tuesday, despite having sold its metals business to the U.K.'s Barclays PLC (BCS).

Speaking at a press briefing at the exchange, Abbott also said membership numbers could fluctuate as a result of the financial crisis.

However, he doesn't expect it to have a big impact on the exchange's profitability nor contribute to a big change in membership numbers in 2009.

Regarding UBS, Abbott said the bank had announced that "they're staying in the exchange cleared business. It's not unusual to maintain access to clearing" to satisfy client needs, Abbott added.

Abbott said the exchange was experiencing some consolidation in its membership as a result of the financial crisis but not necessarily lower volumes.

"Currently we're net unchanged on membership," Abbott said.

Lehman Brothers is still technically a member although it has become insolvent, Abbott said. Bank of America Corp. (BAC) has taken over Merrill Lynch & Co. and J.P. Morgan Chase & Co. (JPM) took over Bear Stearns. All are or were members of the LME.

"We're not anticipating a major change" in membership, Abbott said, adding that "the impact of on our budgets of a major change is minimal."

The exchange derives most of its revenue from traded volumes, data sales, seminars and warehousing, Abbot said. Only a small portion of its revenue is derived from membership, he added.

Furthermore, a decrease in membership wouldn't lead to lower volumes since investors would move their business to other members who can still execute transactions on the LME, he added.

The LME has a total of 92 members, 44 of which are clearing members.

 
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-By Alex MacDonald, Dow Jones Newswires; [phone]; [e-mail]

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