Stonewalling, confidentiality concerns define talks on LME's new warehouse deal

The London Metal Exchange and its approved warehouse companies are trying to negotiate their respective paths around the challenging issues of client confidentiality and incentives that the LME’s new warehousing deal has raised.

One of the requirements of the LME’s new agreement, which warehouses have until February 9 to respond to, is stated in clause 9.3.2: “All warehouses must periodically supply to the exchange information relating to all inducements paid to, or received from, third parties… in the form and at the times specified by the exchange.” Read more about the response to the proposed new warehousing agreement here.  But client confidentiality is one of the foundations of warehouse companies’ commodities business, where rebates and incentives also play a part. The LME, for its part, wants to attempt to ensure that inducements and charges do not have a “manipulative, distortive or disorderly effect on the market”. This has raised serious questions for warehouse companies. Should their private and legal business arrangements with other firms be reported to a third party as a matter of course? And what can...

Published

February 04, 2015

15:58 GMT

London