City of London

The London Metal Exchange (LME) is working with telecoms firm Colt on a new trading network in a bid to provide market participants with a better connection to the Exchange.

The new network, dubbed LMEnet, will be underpinned by Colt's trading network service, PrizmNet.

Robin Paine, appointed LME chief technology officer last year, said the new network will provide market participants with enhanced performance and availability when connecting to the 137-year-old Exchange's electronic systems.

"By switching to LMEnet, the LME community will benefit from reduced latency, increased resilience, and improved control over how they interact with our electronic systems," he said.

The LME has also introduced Colt's new service management tool so that users can monitor latency and bandwidth use with increased granularity.

"We have invested a significant amount in technology over the past 12 months, with more than £30 million devoted to IT projects and systems development," Paine added.

The LME expects to move users to the new system within nine months of Colt's technology being deployed and tested, with migration slots available from October 2014.

The LME handles approximately 80% of the world's trading in metals, mostly electronically via its online systems, but also by phone and physically in its open-outcry trading floor in the City of London.

Participants on the LME can trade metals such as aluminium, copper, tin, nickel, zinc, lead, molybdenum, cobalt, steel billet and aluminium. In 2013, 171.1 million lots were traded on the LME, the equivalent of 4.0 billion tonnes and $14.6 trillion in notional value.

The Exchange was recently bought out by Hong Kong Exchanges and Clearing (HKEx), in a $2.2 billion (£1.42 bn) deal completed in December. The buyout was followed by some changes to the firm's IT contracts, such as the cancellation of a £25 million a year contract with service provider Xchanging.