LME Issues Discussion Paper on Future Market Structure
The proposals aim to achieve increased transparency and a structurally fairer and more efficient marketplace.
SEATTLE (LME): The London Metal Exchange (LME) today issued a discussion paper on market structure, putting forward a set of proposals designed to enable the Exchange to modernise and adapt to emerging trends and evolving customer needs.
The proposals aim to achieve increased transparency and a structurally fairer and more efficient marketplace. They also take account of the rapidly increasing digitisation across commodity trading and the physical metals industry more broadly.
Matthew Chamberlain, LME Chief Executive, commented: “As we set out in the 2017 Strategic Pathway, it is vital that the LME continues to adapt to serve its diverse trading community as effectively as possible. Three years on, it is clear that a desire for greater transparency and fairness, and increasing digitisation across commodities trading, require us to consider changes to some elements of the LME’s structure.
“The LME has an important role to play in responding to these trends, and we believe it is the right time to consider the future development of our market in order to secure its long-term sustainability and growth and maintain the highest standards in our broader ecosystem.”
The discussion paper considers several changes to the LME, which are focused on four main topics as set out in detail below: the Ring and reference prices; enhancing liquidity in the market; the potential benefits of moving to a realised variation margin methodology; and the possible introduction of additional disclosures and policies to strengthen market conduct.
The discussion paper also identifies key features which the LME wishes to protect and maintain – such as its date structure – and this balance is reflective of the Exchange’s commitment to the principles set out in its 2017 Strategic Pathway: serving the physical market, ensuring fairness, increasing user choice and maximising trading efficiency.
Courtesy: www.lme.com