LME needs help regulating warehouses, Novelis says

The London Metal Exchange “needs help” in regulating its warehousing system, a senior executive at Novelis has said, calling on the US Commodity Futures Trading Commission to expand its regulatory scope.

Nick Madden, senior vp and chief supply chain officer for US aluminium consumer Novelis, told a US Senate hearing in Washington DC that, despite a more open attitude at the exchange toward implementing change, the LME could not handle everything necessary alone. He also called for banks and trading companies to be banned from owning warehouses and said that rent should be banned for metal stuck in queues. Madden said that these recommendations were his “three wishes”, should he be granted a magic wand. “First, banks and trading companies should not be allowed to own warehouses. Second, we need to clarify the scope of the US Commodity Futures Trading Commission [CFTC] to ensure it covers warehousing,” he said. “And third, warehouses should be prohibited from charging rents for commodities such as aluminium when they’re in the queue,” he...

Published

Andrea Hotter

November 20, 2014

19:56 GMT

New York