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The objective of The London Metal Exchange Limited is to provide facilities, along with a management and regulatory structure, for trading in LME contracts. Although its activities are closely related to the physical markets, it operates within the regulatory framework of the Financial Services and Markets Act 2000.
It is a Recognised Investment Exchange (RIE), regulated directly by the Financial Services Authority (FSA). The Act closely defines the conditions under which the Exchange operates and requires that as an RIE it maintains orderly markets in all its contracts.
Where it carries out its activities in the United States (US), the Exchange is governed by the relevant US legislation and by the Commodities and Futures Trading Commission (CFTC). It is also subject to any relevant directives of the European Union.
The London Metal Exchange Limited has up to 13 directors - comprising up to two invited directors with substantial experience of the metals industry and trade, up to three independent directors and up to six shareholder representative directors of LME Holdings Limited, who are elected from the membership, a trade director and the LME's CEO. The LME Holdings Limited board is drawn up in a similar fashion.
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