LME Clear has an enhanced collateral service that allows members to pledge LME warrants against their margin requirements.

This is a unique offering from LME Clear – the clearing house purpose-built for the metals market.

The Warrants as Collateral service provides improved efficiency for the LME marketplace, and, in certain circumstances, serves as a natural hedge against cleared positions. Using LME warrants as collateral may also allow members to optimise assets on their balance sheet in a more cost effective manner.

Key points to note

LME Clear accepts warrants as collateral for underlying metal held in the following warehouse locations:

  • England and Wales
  • Belgium
  • Germany
  • Malaysia
  • Singapore
  • South Korea
  • Taiwan
  • USA

Warrants of a metal can only be accepted as collateral for the underlying metal (ie aluminium warrants will be acceptable as collateral to cover aluminium positions) and members are not permitted to post LME warrants which relate to underlying metal located in their jurisdiction of incorporation unless the member is incorporated in England and Wales.

Please see the warrants as collateral FAQs for further details. Please also refer to LME Clear's EMIR Article 39(7) disclosure statement, available on the disclosure and transparency page. 

Members wishing to post non-cash collateral will be required to sign additional documentation. Certain formalities (including registration of security interests) may apply before non-cash collateral is accepted. LME Clear will only accept non-cash collateral from members where it is satisfied that the arrangements are enforceable without delay in the event of a member default. Members should note there may be a lead time to posting warrants as collateral due to the need to access this for each member.

Fees for the warrants as collateral services are set out in the fee schedule.

Disclosure and transparency

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