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Independent nickel market review

The LME has selected Oliver Wyman to conduct an independent review into events in the nickel market leading up to the suspension in March 2022.

Notice 22/181: Independent Nickel Market Trading Review - Market Engagement

Notice 22/168: Independent Review Selection - Oliver Wyman

The review will include extensive market engagement and data collection and is expected to run until December 2022, with the intention of publishing a final report at the end of this process.

The Oliver Wyman independent review is seeking to:

  • form a thorough understanding of what led to the market conditions in the Nickel market in Q1 2022 leading up to the market suspension on 8 March 2022;
  • consider the factors that contributed to these conditions in the Nickel market; and
  • identify actions that could be taken by the LME and LME Clear to reduce the likelihood of similar market conditions arising, and mitigate and minimise the impact of them in the event they were to arise.

We look forward to considering recommendations put forward as part of the review findings, and to taking further steps to support the long-term health, efficiency and resilience of the market and its constituents.

Market engagement

As part of the fact-finding phase, Oliver Wyman would like to hear views on the following topics:

Physical contract specifications and linkages
Trading limits, controls and rules
  • Supply and demand in the underlying Nickel market, concentrations, and susceptibility to shocks
  • Alignment between the LME Nickel contract and the wider physical nickel market
  • Delivery rules and requirements, lending rules and backwardation limits
  • Position reporting, position limits and accountability levels
  • Trading rules and real-time trading controls
  • Suspicious or anomalous trading activity
Risk management, clearing & collateral model of LME, LME Clear, Members
Market structure and roles of institutions
  • Margining methodology and margin call practices
  • Concentration risks and margin lending practices
  • Capitalisation and liquidity levels across the market and exposure limit setting
  • Loss sharing structures and associated incentive
  • Distribution of liquidity across venues
  • Opening hours and available liquidity
  • Prompt date structure and distribution of liquidity
  • Depth of liquidity and client order routing
  • Price benchmark timing & methodology

Instructions on how to participate as well as guidance on specific areas of enquiry and further information on how your feedback will be used can be found in LME Notice 22/181: Independent Nickel Market Trading.

Contact us

Instructions on how to participate as well as guidance on specific areas of enquiry and further information on how your feedback will be used can be found in LME Notice 22/181: Independent Nickel Market Trading Review - Market Engagement.

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