INTERVIEW: Market must assess risk-reward of rent cap or ban, LME exec says

The London Metal Exchange is calling on its members to make a careful assessment of the pros and cons of a potential cap or ban on rents in queues to ensure the market is comfortable that the balance is correct.

Matt Chamberlain, the LME’s head of business development, told Metal Bulletin that the exchange could be opening itself up to the increased chance of litigation along with lengthy market-disrupting delays if it decides to cap or ban rents in warehouse queues and cap the level of daily rent charges and fots.
“We’re making no bones about the fact that these are more risky approaches from a legal perspective than anything we’ve proposed before,” Chamberlain said.
“We’re asking people to really take a view on the risk-reward balance,” he added during an interview in New York.
This week, the LME published a two-month discussion paper regarding the final elements of its warehouse reform package, namely a number of possible measures surrounding rental charges. The paper, which has a deadline for comments of May 2, also highlighted possible competition law concerns.

Chamberlain noted that if the exchange pushed...

Published

Andrea Hotter

March 03, 2015

17:25 GMT

New York