* LME hopes to implement digital improvements by year-end
* Proposes to makes changes to final spread prices
* See FACTBOX on proposed changes
LONDON, Oct 22 (Reuters) - The London Metal Exchange is not
trying to permanently close its open-outcry ring "by stealth"
with its push to boost digital trading during the COVID-19
pandemic, its chief executive told Reuters on Thursday.
The ring, the last trading floor of its kind in Europe,
closed in March for the first time since World War II due to the
outbreak, ending its theatre of arcane hand signals and frenzied
shouting by traders.
LME CEO Matt Chamberlain said in a speech on Monday the
exchange intended to improve its electronic trading system
because it expects the coronavirus crisis will keep the ring
closed for many more months.
"There are theories circulating that we're using this whole
thing to close the ring by stealth," Chamberlain said in an
interview on Thursday.
"The position remains very much that we want to reopen it...
we see business continuity during the coronavirus situation, and
the future of the ring, as separate discussions."
The impetus for improving electronic trading during the ring
closure at the world's oldest and largest market for industrial
metals came from users, he added.
A working group is due to review the efficiency proposals in
about two weeks, Chamberlain said. If they are approved, they
could be implemented by year-end.
When the 143-year-old exchange temporarily closed the ring
and shifted activity to its electronic system, it retained the
ring system to calculate end-of-day prices on the curve, a
myriad of complex forward calculations.
The LME is unique among exchanges in that it allows users to
lock in prices for individual days for the first three months
forward and weekly for up to six months, meaning there are
hundreds of potential dates to trade and adjust.
"We deliberately maintained the ring approach to the curve
(in the digital system) because that's the most unique thing
about our ring," he said.
"We didn't want to change the curve methodology, but we've
now heard (complaints) from enough traders."
(Reporting by Eric Onstad and Pratima Desai; Editing by Jan