The exchange has rewritten several key parts of the warehouse agreement, which governs the behaviour of companies that are listed for delivery of metals onto the exchange. Responses are due by February 9.
The new draft of the deal makes plainer the LME’s intention, as regulator of the market under the UK’s Financial Conduct Authority, to require regular information about incentives and details of off-warrant material on an ad-hoc basis, as and when it sees fit.
Opinions among warehousing companies about the effects of the new deal differ sharply: some welcome the LME’s move to capture more information, while others deplore what they see as an intrusion into private business arrangements.
But most argue that the new agreement risks alienating some of their producer and trading company clients, who value confidentiality and privacy highly.
The LME’s rewritten warehousing agreement was released on November 7, shortly before the release of a US...