The company has written to the chairman of the Commodity Futures Trading Commission (CFTC), spelling out very clearly that the regulator has overstepped its bounds in effectively telling the LME how it should handle the next step in its warehouse reform package.
Alcoa also criticised the fact that the CFTC says it has deferred consideration of the LME’s application for registration as a foreign board of trade pending the exchange’s “progress” in making those warehouse reform changes.
The communication from the CFTC to the LME was not intended to be public: it became so in a CFTC letter to the exchange that was leaked in March. But the letter's message – described by Alcoa as a “regulatory ultimatum” - was pretty clear.
Apart from the LME not being within the regulatory remit of the CFTC, Alcoa argues, the CFTC’s interference appears to have changed the LME’s mind about queue-based rent...