TD Securities to Consider LME Membership in Metals Expansion

Feb 04, 2014 5:33 am ET

(Updates with comment on U.S. expansion in last paragraph.)

Feb. 4 (Bloomberg) -- TD Securities Inc., a unit of Toronto Dominion Bank, will consider applying for London Metal Exchange membership as it expands in industrial metals.

The unit of Canada’s biggest bank by assets started trading industrial metals last month, Tim Gardiner, managing director of global metals, said in a telephone interview yesterday. TD Securities will assess a membership after January 2015, when the LME’s owner, Hong Kong Exchanges & Clearing Ltd., may introduce changes to the world’s biggest metals marketplace.

“There is no big rush for us to become a member of the LME,” Gardiner said. “We would like to join but we want to see what changes, if any, are going to be made.”

Hong Kong Exchanges, which bought the LME for $2.2 billion in 2012, pledged to freeze trading fees and keep the bourse’s open-outcry trading floor until at least January 2015.

TD Securities hired Andrew Brown as director of base-metals trading in London, Gardiner said. Brown was previously head of metals trading at UniCredit SpA and before that an options trader with Marex Spectron Group and Credit Agricole CIB.

TD Securities joins Grupo BTG Pactual and ABN Amro Group NV in expanding in commodities as some of Wall Street’s biggest banks retreat. JPMorgan Chase & Co. is near a decision to sell its physical commodities unit, people with knowledge of the matter said last week. Deutsche Bank AG is cutting about 200 commodities jobs after deciding last year to exit dedicated energy, agriculture, dry bulk and base metals trading.

Canadian Banks

Canadian banks were ranked the world’s soundest for six straight years by the World Economic Forum. RBC Capital Markets, owned by Royal Bank of Canada, last year hired Bruce Garner as head of its metals business and Kathy Kriskey as head of commodity investor sales.

TD started trading precious metals three years ago, Gardiner said. The bank has 12 staff in precious and industrial metals trading and will hire more “as necessary,” Gardiner said.

“We have a big client base that is involved on the producing side of the metals, but also with the expansion of the Toronto Dominion Bank in the U.S. we have a lot of consumers as well,” Gardiner said. “It’s a nice fit for us.”

--Editors: Dan Weeks, Claudia Carpenter