By Eric Onstad
LONDON (Reuters) - Sigma Broking Ltd is set to become the first new ring trading member of the London Metal Exchange in 14 years later this month, a source with direct knowledge told Reuters, amid doubts about the future of the ring.
Sigma has applied to join eight other banks and brokers that trade in the ring or open outcry, the source said.
Both Sigma, which trades equity, fixed income and commodities, and the LME declined to comment.
The LME, the world's oldest and largest market for industrial metals, reopened its ring on Sept. 6 using a hybrid model after a closure due to the COVID-19 pandemic.
Triland Metals, however, ended nearly half a century on the LME floor due to the "reduced responsibility of the ring".
In the new system, official or settlement prices are set in open outcry, but closing prices have switched to the electronic system, which some ring members say will slash their profits.
Sigma believes it can service clients in the ring, such as hedge funds, many of which currently do not trade on the LME, the source said.
The LME is expected to approve the application in time for LME Week starting on Oct. 11, the source added.
Sigma's move would mark the first new ring membership on the LME since EDF & Man joined in 2007, excluding companies that have taken over existing ring members.
In the ring, a circle of padded red-leather seats, traders use arcane hand signals during five-minute bursts of intense trading in copper, aluminium, zinc, lead, nickel and zinc.
Sigma Broking is majority-owned by futures trader Matthew Kent while Simon Tyson has a stake of more than 25%, according to filings at UK Companies House.
(Reporting by Eric Onstad; editing by Pratima Desai and Louise Heavens)