There has been confusion over clause 7.3.3 of the LME warehouse agreement, which the exchange is proposing to amend to clarify its powers in terms of access to information on metal in storage.
The consultation states the change is a clarification – that it has always had the power to call for information regarding off-warrant stocks.
The clause has always stated that the LME has power to call for information on any metal with the potential to be deliverable on the exchange, which must naturally include off-warrant material, and the new wording makes this clearer to the market.
The clause also states that “all such information so supplied shall be treated as confidential by the Exchange”.
As long as material has the potential to become warranted, the LME has the power to compel information on it, whereas under the previous wording, there was arguably more room for push-back from market...