LME cannot cap warehouse rents, dictate ownership

The London Metal Exchange is working to address the delivery obligations at its approved warehouse network, but is not legally able to cap rental charges or dictate who owns warehousing companies, the bourse said on Tuesday July 23.

“Since 2010, the LME has brought in a series of proposals to alleviate warehousing queues that have built up in some locations, but we are legally restricted from capping rents and preventing trading companies from owning warehousing companies,” the exchange said.
“We are consulting with the metals trade and industry on a proposal to amend the delivery obligations of warehouse companies with long queues. The LME has continuously monitored this issue and has tried to balance the interests of the market as a whole, through the economic cycle,” it added.

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Andrea Hotter

July 23, 2013

19:17 GMT

New York