The LME will now require warehouse companies to check all agreements with third parties, such as landlords and service providers, to ensure that its agreements do not contain any such rights of retention or lien – the right to keep possession of property until a debt is discharged – over LME metal, it said in a notice to members on Wednesday August 8.
The rule comes following a review of the delisting of WWS on June 21
, when the LME learnt that landlord warehouse companies of WWS had refused to release LME-warranted metal because of debts owed to them.
LME said it had been aware of potential concerns around the financial stability of WWS throughout June 2018 and closely monitored the situation.
But “on the basis of this information, [that certain WWS warehouse landlords were holding metals]...