| The Exchange provides the environment for trading. It has a statutory requirement of ensuring that business on its markets is conducted in an orderly manner, providing proper protection to investors. The members are the institutions involved in trading with each other and with their customers. Their regulatory requirements include the provision of the appropriate service to those customers. Regulation of the market is largely carried out by the LME, while the Financial Services Authority (FSA) is responsible for regulating the financial soundness and conduct of LME members' business.
Approved as a recognised investment exchange (RIE) and conforming with British and other international regulatory requirements, the LME offers, through price and volume transparency and audit trails, a legally safe forum for metal and plastics trading. As an RIE, the exchange comes under the direct jurisdiction of the FSA. LME members also operate in a strict regulatory environment policed by the FSA.
In brief, it is the responsibility of the LME to regulate the operation of the market; the FSA is responsible for the authorisation and regulation and conduct of business issues of the members of the LME.
Beyond this, both the exchange and its members are subject to regulatory controls and input from various UK bodies and government offices, as well as directives from the EU Commission in Brussels. In international trading, rules applied by overseas regulatory bodies such as the CFTC in the USA also have to be taken into account.
To ensure the observance of these regulations, the LME has a compliance department under the supervision of its executive director of regulation and compliance. This department monitors the market and member positions in order to analyse developments and ensure that the LME is delivery its regulatory responsibilities.
The exchange has a highly developed policy to regulate the market so that it can carry out its statutory responsibility to ensure orderly markets. Key features of this policy are set out in the document "Market Aberrations: The Way Forward", published in October 1998. This document is available to download at the end of this page.
The LME has three divisions within its regulation and compliance department to carry out its role of regulating the market. These are market surveillance, member surveillance and enforcement. There is also an independent investigations unit.
LME Rules and Regulations
The London Metal Exchange Rules and Regulations can be accessed online or purchased from the LME Online Store.
To purchase the LME Rules and Regulations in printed format click here.
For more information about the LME Online Rulebook click here. |
