CRU: LME Reforms: More Evolution, Than Revolution

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CRU

21 Sep, 2017, 08:30 GMT

LONDON, September 21, 2017 /PRNewswire/ --

Following the discussion paper that was launched in April, and weeks of consultation, the LME announced its planned reforms when it set out its Strategic Pathway on Thursday 7 September.

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Many feared dramatic changes would be announced, that the days of the daily prompt system was nearing an end, and that the LME would turn itself into a US style exchange with a monthly prompt structure. Instead, the daily prompt system will remain, and the LME will optimise the way it works rather than changing fundamentally. That appears to have been the overwhelming desire of the physical users and the LME has acknowledged that.

Consulting the market
The LME first announced that it received 162 responses from its discussion paper and most of the feedback came from physical users, not LME members. There were concerns voiced that the LME would give up its daily prompt system. This system was designed for physical users, so that explains why they were so keen to respond.

The LME is suggesting no change to its daily date structure. Instead the LME said it would introduce two changes immediately:

  1. A carry fee discount
  2. A new over the counter (OTC) financial fee

Then it presented a series of potential strategic changes for the long run that will be subject to further discussion with members and users.

Read the full story: http://bit.ly/LME-Reforms

Read more about CRU: http://bit.ly/About_CRU

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