In November 2013, following a three-month market-wide consultation, the LME launched a warehouse reform package with twelve key elements.
Seven of these elements have already been implemented:
1.Linked Load-In / Load-Out Rule (LILO)
The LME is running an additional consultation on the LILO Rule which will be open until 30 March 2015. This consultation proposes an increase in the LILO decay factor. This consultation will run for four weeks, and the LME invites responses from all market participants.
2. Separate steel load-out rate
3. Per-warehouse queue length report
4. Commitments of traders report
5. Creation of the Physical Market Committee
6. Specific powers for the LME to address behaviour that creates or maintains queues (clause 9.3.4– now clause 9.3.5 – of the Warehouse Agreement )
7. Information barrier policy review
Following consultation, the following two items will be introduced on 1 June 2015:
8. Amendments to LME policies and procedures resulting from an independent logistical review
9. Changes to the Warehousing Agreement following independent legal review
The following two items are subject to a discussion appear which is open until 2 May 2015:
10. LME powers to cap or stop rent in queues
11. LME powers to cap rents and FoT rates
Until this discussion period closes the LME will be available for meetings and calls on these two items, as well as the other potential reform items contained in the discussion paper, and welcomes all feedback from the market.
12. The twelfth and final item in the reform package, premium contracts, will now be launched on 26 October 2015.
All the changes outlined above are designed to address the need to ensure that the LME’s warehouse network fully serves the requirements of the global metals market.
Documents relating to the LME’s warehouse reforms can be found below. Should you have any questions related to the consultation, please contact us at firstname.lastname@example.org