LME's China warehouse plan hits snag

Plans by the London Metal Exchange (LME) to set up licensed warehousing in Shanghai may have received a setback as a result of a decision by a Chinese regulator to maintain the status quo.

The China Securities Regulatory Commission (CSRC) said in a recent website statement that foreign exchanges will not be allowed to establish a warehouse presence in China until the relevant 'policies, rules, and laws' are in place.  Market participants said this was effectively a ban on any such move, until further notice. CSRC officials could be wary about the potential for an LME presence to erode the price-setting power of local exchanges, such as the Shanghai Futures Exchange. “The physical delivery of LME base metals would influence...


September 03, 2008

07:01 GMT