Update on our public statement on the London Metal Exchange

Following last year’s announcement of the Financial Conduct Authority (FCA) and the Prudential Regulatory Authority of the Bank of England (PRA) to initiate further steps as regards the trade suspension of nickel trading on the London Metal Exchange (LME) that took place between March 8 and March 15, 2022, the FCA has now published a follow-up on this matter.
Therein, the FCA notes that it has since then made clear to LME its expectations as regards the analysis of events that led to the trade suspension and as regards the exchange’s approach towards „market structure, including the role of transparency in facilitating effective risk management“. So far, the regulator has seen strong efforts on part of the LME to increase trading transparency particularly in the OTC area which shall help establish „robust risk management in its on-exchange trading“. Additionally, the LME has committed itself to „a wider package of market reform“.
The FCA concludes by stating that it will closely monitor LME’s efforts to transpose the package. As far as its own investigation into the matter is concerned, the Authority remarks that it „will not make any further comment in line with normal policy“.