As part of its collateral service, members are able to pledge LME Warrants as collateral against their margin requirements. This is a unique offering from LME Clear - the clearing house purpose-built for the metals market
Members wishing to post non-cash collateral including warrants are 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 is a lead time to posting warrants as collateral due to the requirement to obtain legal advice as to the enforceability of the arrangements in the relevant jurisdiction(s).