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Self clearing FAQs

Why has the LME decided to create its own clearing house?
Where will an LME clearing house fit into the LME’s governance structure?
How much will the creation of an LME clearing house cost LME clearing members and shareholders?
How long will it take to build and implement an LME-owned and -operated clearing house?
How will members be consulted during the implementation of an LME clearing house?
Is the LME capable of delivering a new clearing house?
Are systems available that meet the needs of an LME clearing house?
What will be the fees structure of the LME’s clearing house?
What benefits will shareholders and clearing members receive from an LME-owned clearing house?
Will margin requirements be covered by a broad range of currencies and collateral including physical material, government and corporate debt and financial institution guarantees?
What will the capital, insurance, member and default requirements be? Similarly, what are the levels and value of coverage against any member default?
Will a separate LME default fund require additional contributions from clearing members?
Will members lose any cross-market margin benefits?
Members have recently invested in back office upgrades for Synapse. Will the LME’s clearing house require a similar investment from clearing members?
Can a stand-alone LME CCP compete on costs, service or counterparty credit risk with a clearing house dealing with multiple asset classes?
Will the lack of risk diversification caused by a single exchange, single CCP model class create extra risk for the market?
What is the impact of the current bid process surrounding the LME?
 
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