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Market access arrangements for member applicants

Core LME & LME Clear Systems

The LME operates three trading venues, an electronic trading platform (LMEselect), an open outcry trading floor referred to as the Ring, and the inter-office or Telephone Market.


Trading & Matching

The electronic trading platform is called LMEselect. Orders may be placed into the central order book via the LMEselect GUI or via the LMEselect FIX API. Trades executed in LMEselect are automatically transmitted to the LME matching system, LMEsmart, and then into the clearing system, LMEmercury, operated by LME Clear. Trades executed in the Ring or in the Telephone market are entered into LMEsmart using the LMEsmart GUI or the FIX member interface and are then automatically transmitted to LMEmercury for clearing. LMEselect is not a mandatory LME system but LME members generally opt to utilise the LMEselect GUI and the FIX member interface in order to execute LME Contracts electronically and to offer their clients an electronic order-routing service.


Warrant Management

LMEsword is the LME’s warrant management system. Warrants are issued by LME-approved warehouses and are bearer documents entitling the holder to receive delivery of a specific parcel of metal at a specified warehouse. LMEsword allows for the lodging of warrants with the Depository and the transfer of warrants between account holders. When an LME Contract goes to delivery, the seller will deliver a warrant to LME Clear via the LMEsword system and receive cash in return. Conversely, the buyer will receive a warrant from LME Clear into their LMEsword account via a random allocation process and make payment to LME Clear.


Position Reporting

Category 1, 2, 3 and 4 members are required to report all warrant holdings, LME positions for house and client accounts and open interest as at the close of business each day. These reports must be made electronically the following morning via the LME’s Daily Position Reporting System, LMEdprs.


Systems Access Options

Cat 1  Cat 2  Cat 3  Cat 4 1  Cat 5
LMEselect Electronic Trading O O O O O
LMEsmart  Post-Trade Matching & Registration N
LMEmercury  Clearing & Risk Management  N
LMEsword  Warrant Management  N
DPRS  Daily Position Reporting N

1Category 4 Members are non-clearing members and may choose to outsource post-trade and reporting activities to their Nominated Clearer

key
R Required
O Optional
N Not required

Connectivity arrangements

Connectivity to core LME and LME Clear systems can be achieved via leased line connectivity to LMEnet, via an approved Independent Software Vendor (ISV), or via proximity hosting in the LME’s Community Data Centre’s (CDC) in Equinix LD4 or InterXion. LMEnet connectivity provides access to all LME systems. Category 1, 2, 3, and 4 members who are accessing systems directly need to ensure their chosen solution provides connectivity to all required systems, or that they put in place arrangements to outsource any other required system access to another LME member.

CDC LMEnet Approved ISV
LMEselect Electronic Trading Y Y V
LMEsmart Post-Trade Matching & Registration N Y V
LMEmercury Clearing & Risk Management N Y V
LMEsword Warrant Management N Y V
DPRS Daily Position Reporting N Y V
key
Y Provided access
N Does not provide access
V Varies from provider to provider