LME in the sights of British regulators after the nickel market debacle

Posted Apr 4, 2022, 4:25 PMUpdated on Apr 4, 2022, 5:36 PM

After the recent chaos in the nickel market, reckoning has come for the London Metal Exchange. The British market policeman (Financial Conduct Authority) and the Bank of England have decided to review, from top to bottom, the functioning of the London Metal Exchange. After a jump from 30,000 to 100,000 dollars per tonne in just over 24 hours, the quotation of nickel was suspended for a week and nearly 4 billion dollars of transactions were canceled, an unprecedented decision in the history of this 145 year old institution.

In detail, the FCA will look into the suspension and resumption of trading while the Central Bank, via its prudential control body, will focus on the compensation part of the stock market operator “LME Clear”. In a joint press release, the regulators say they want to learn all the lessons from this event both on governance and on risk management within the institution.

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