SEATTLE (Scrap Monster): The London Metal Exchange (LME) announced that it has decided to delay by seven weeks the requirement to report all over-the-counter (OTC) positions. The implementation date has now been changed to September 5th, from the original date of implementation of July 18th.
According to the statement released by the Exchange, the delayed implementation date of the requirement will ensure proper and accurate reporting of data. The decision has been taken following the series of dialogues by it with the members and other interested parties, in which concerns were raised regarding the feasibility of members to meet the original implementation date.
An unprecedented spike in nickel prices had caused the Exchange to halt nickel trading during the month of March this year. A disorderly activity, partly due to a large OTC short nickel position was blamed for the crisis.
In a statement released in mid-June, LME had stated that all its members would have to report OTC positions on a weekly basis. Also, those holding large OTC positions would have to explain the rationale for holding them, it had said.
The LME is being probed by the British financial regulators on suspension of nickel trading activity. In addition, the Exchange has also initiated its own independent review. Meantime, the exchange has been sued by two U.S. hedge funds for a sum of around $480 million on account of cancelled nickel trades.