LME confirms wider access to electronic platform; rejigs close

LONDON, July 31 (Reuters) - The London Metal Exchange (LME) on Friday confirmed plans to widen access to its electronic trading system despite some objections and also said it would slightly change the way closing prices are traded.

The LME launched a consultation in May on proposals to boost liquidity by making it easier for new members, including U.S. speculators, to have direct links to its trading platform LMEselect.

The changes may make it easier for the exchange, the world's biggest and oldest market for industrial metals, to cement deals with market makers to guarantee liquidity for its new steel rebar and scrap futures due to be launched on Nov. 23.

As of Aug. 10, when the new rules take effect, category 3 and 4 members will be allowed to trade on its electronic platform LMEselect in addition to category 1 and 2 members.

The LME has been targeting overseas proprietary traders to become active on the exchange, some of which have shown interest in becoming market makers for the new contracts.

"The Chicago prop shops are a good example. They're very interested in our market and we're confident that they'll trade a lot more if they can have direct access to LMEselect," Matthew Chamberlain, head of LME business development, told Reuters in May.

Some members that responded to the consultation said diluting standards of trading could damage the LME's reputation, but the exchange rejected those and other complaints.

"The LME is of the view that the competition engendered by the changes will, overall, improve liquidity on the exchange," a statement said.

The LME, owned by Hong Kong Exchanges and Clearing , said in a separate statement it planned a modest change in how closing prices would be determined in open outcry activity.

During the five-minute period of closing trading for each metal, the last minute would be devoted to trading the benchmark three-month contract.

"This refinement is designed to separate out the closes for carry trading and three-month trading to bring greater focus and clarity to each close-out," said Peter Childs, head of trading operations and price discovery. (Reporting by Eric Onstad, editing by David Evans)