Three Chinese brokerage arms - Yongan Futures, Orient Futures and Guotai Junan Futures - are preparing to seek membership of the London Metal Exchange, according to people familiar with the matter. If approved, those applications would increase Chinese participation among the LME's clearing members and support the brokers' stated ambitions to broaden their global operations and capture a greater portion of metals derivatives revenue.
Only six of the exchange's more than 40 clearing members are currently Chinese, leaving China, the world's largest industrial metals consumer, relatively under-represented among the firms that clear and settle trades on the LME. The prospective applications come as Chinese brokers have been expanding their international footprints, including establishing subsidiaries in Singapore over the past decade.
Who is preparing to apply
One source said Guotai Junan Futures is already in the process of applying for LME membership. Two other sources indicated Orient Futures also intends to apply, but that the timetable for any submission is unclear. Four sources said Hangzhou-based Yongan Futures is preparing its own application after setting up a UK entity last year; those sources declined to be named because the plans are not public.
Yongan's UK arm is registered as Yongan International Financial (UK). Company registration paperwork shows that Zhang Wei was appointed director in April. According to the sources, Zhang was hired to lead the British operation and guide the brokerage through the LME approval process. Zhang previously worked at an existing Chinese LME member, GF Financial Markets, in London, and at China Merchants Securities, which resigned its LME membership in early 2021 after six years.
Zhang and the three brokerages did not provide comment when contacted. On an interactive investor platform this month, Yongan stated it is applying for a regulatory licence from Britain's Financial Conduct Authority and is working to establish "a solid foundation for legal and compliant operations in the UK and European markets." Two sources said the FCA licence would be a precursor to an LME membership application, though Yongan's public statement did not name the exchange.
In that statement Yongan said: "In the future, leveraging the advantages of London as an international financial centre and collaborating with resources in Hong Kong and Singapore, we aim to become a leading cross-border integrated financial services provider."
Market context and clearing dynamics
The LME, owned by Hong Kong Exchanges and Clearing, reported record futures trading volumes of 183.3 million contracts last year, an increase of 7.7% from 2024. Much of that activity is routed through non-Chinese clearing members, which capture clearing fees and other trade-related revenue. Chinese firms seeking LME membership are seen by the sources as attempting to increase the share of fees and other revenues that flow to domestic brokers when Chinese market participants trade on the exchange.
CLSA UK, owned by China’s CITIC Securities, was approved as an LME member last month and is scheduled to begin trading on Monday. An LME spokesperson, declining to comment on the specific membership applications, said: "As the world’s largest industrial metals producer and consumer, China is fundamental to the global metals market and represents significant activity in the LME market."
Implications explicitly supported by available information
- Chinese brokerages are increasingly pursuing direct access to global derivatives venues to capture a larger share of trading and clearing revenue.
- Only a small number of existing clearing members on the exchange are Chinese, despite China’s central role in metals consumption.
- Regulatory approvals in the UK, such as an FCA licence, appear to be a step Chinese brokers are pursuing ahead of formal LME membership applications.