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Member surveillance

Member Surveillance monitor LME members to ensure trading activities comply with rules around trade registration and matching. The rules are set to reflect the latest trading practices on the LME.

This is done through our Daily Trade Monitoring Programme and Member Visit Programme.

Member Surveillance also acts in an advisory capacity responding to day to day queries from members regarding transaction types and registration methodologies.

Daily Trade Monitoring (DTM)

Monitors the accuracy of trades submitted to the LME matching system, LMEsmart, and if members are following the registration and matching rules. Exception reports are produced on a daily basis for review by the Member Surveillance analyst.

Certain rule breaches are reported to the compliance officer at the member firm. Other registration anomalies are collated throughout the month and reported to the member firm's compliance officers to investigate.

Through this process, compliance officers and matching personnel can continue their education in LME trade registration rules. This reduces errors and improves the quality of the information stored in the matched trades database.

Member Visit Programme

A rolling regulatory visit programme for LME trading members is carried out by Member Surveillance. These visits are used to:

  • assess the processes and controls members use to govern their trading activities
  • report rule breaches
  • identify remedial action.

How often we visit depends on how complex the firm's business model is. Routine visits are usually carried out every three to four years but may vary.

Training

To gain a better understanding of the market structure, regulatory requirements and LME rules governing trade input and matching.