Category 1 to 5 membership of the LME is on a corporate basis and all membership applications must be approved by the Board of The London Metal Exchange. Membership to the Exchange is governed by Part 2 of the LME Rules and Regulations, and a guide to membership is available for download.
Types of Membership
There are various categories of membership. These categories are divided between broker members and trade members. The criteria required for an applicant company to be successfully approved by the Board will vary according to category.
Broker members are those companies allowed to issue LME contracts - buying and selling material on behalf of their customers. Companies can become Ring dealing or associate broker clearing members if they are also members of the clearing house. Those companies who do not wish to clear business, may decide to become associate broker members.
Trade members are industrial or financial companies with a key presence and interest in the metal industries. Companies with operations in these areas may decide to become associate trade members. This category of membership is sought primarily to keep abreast of LME activities, its contracts and their development and news on the Exchange itself.
Companies that are also members of the clearing house can join as associate trade clearing members to trade and clear their own business.
Requirement to hold B Shares in LME Holdings Limited
Applicants are required to comply with a number of financial and regulatory criteria and, in addition, a minimum shareholding of B shares in LME Holdings Limited is required. The number of B shares required depends on the category of membership being applied for.
Category 1 and 2 members of the Exchange are required to hold a minimum of 25,000 B shares in LME Holdings Limited. Each Category 3 member is required to hold a minimum of 5,000 B shares in LME Holdings Limited and each Category 4 member is required to hold a minimum of 2,500 B shares in LME Holdings Limited. Category 5 members are not required to hold B shares in LME Holdings Limited.
Process for Acquiring B Shares in LME Holdings Limited
Applicants must source the minimum amount of B Shares in order to satisfy the membership requirements from existing B Shareholders. LME Holdings Limited is unable to assist buyers or sellers with arrangements for any sale / purchase of B Shares.
A list of the current B Shareholders is available.
In the event that an applicant cannot acquire B Shares, LME Holdings Limited in accordance with the B Share Scheme can issue the requisite amount of B Shares to an applicant in order to satisfy this membership requirement. Further information can be obtained by contacting firstname.lastname@example.org.
The B Share sub committee met on 23 June 2014 and after taking into account all relevant factors, it resolved to set the price at which LME Holdings Limited will issue B Shares (if required) to £72 per B Share. This price will be in respect of issues of B Shares made between 24 June 2014 and 19 September 2014. For issues after this date, the B Share sub committee will determine whether to maintain this price or change it.
If you are interested in becoming a member of the Exchange please contact email@example.com to obtain the application documentation.
All membership applications must be approved by the Board of The London Metal Exchange. Prior to this, all membership applications undergo a due diligence exercise, whereby the application is assessed by the Exchange .Once an applicant has successfully undergone the due diligence exercise, the application will be presented to the Executive Committee in order for the membership application to be endorsed.
Should the Executive Committee endorse the membership application, it is then presented to the Board of The London Metal Exchange for approval.
Please note that to view LME market data or to trade on the LME yo u do not need to become a member of the Exchange.