Executive and board committee

The Audit Committee is composed of at least four individuals, of which at least three are appointed from the independent directors and at least one individual must have relevant and recent financial experience.

Audit Committee - Terms of Reference (PDF)

The Board Risk Committee (“BRC”) is a sub-committee of the Board established to assist the Board, advise and make recommendations to the Board in fulfilling its risk oversight responsibilities. It shall oversee the risk strategy; risk appetite; and the risk profile of the Company. In discharging its primary purpose, the Committee will take into account the risk appetite of the Hong Kong Exchanges and Clearing Group Limited and also recognise the interests of other relevant stakeholders of LME Clear Limited. The BRC will consult with the EMIR Risk Committee as appropriate.

Membership of the BRC shall comprise at least three non-executive directors, the majority of whom shall be independent. The Committee shall include at least one member of the audit committee and / or include one non-executive director specifically responsible for risk.

Further information regarding the responsibilities of the BRC can be found in its Terms of Reference.

Board Risk Committee Terms of Reference (PDF)

The EMIR Risk Committee (“EMIR RC”) is a sub-committee of the Board which shall advise the Board on arrangements that may impact the risk management of the Company (a CCP (Central Counterparty clearing house)), such as a significant change in its risk model; the default procedures; the criteria for accepting clearing members; the clearing of new classes of instruments; or the outsourcing of functions as required under the UK European Market Infrastructure Regulation (UK EMIR).

The Committee will be composed of at least six (6) and a maximum of fourteen (14) individuals of whom:

• At least two (2), and a maximum of three (3) shall be independent Non-Executive Directors (as defined by the articles of association of the Company);
• At least two (2), and a maximum of four (4) shall be representatives of clients of clearing members; and
• At least two (2), and a maximum of seven (7) shall be representatives of clearing members. 

The Committee shall be constituted to ensure that as required by regulation no one Committee membership category shall have a majority of votes.

The duties of the Committee include monitoring and assessing the adequacy and effectiveness of the Company’s risk management policies, procedures and risk management systems and methodology insofar as they relate to market, credit and liquidity; and advising the Board on the initial versions of, and any changes to, the LME Rulebook which impact on the risk profile of the Company.

For the avoidance of doubt, the Committee shall act in an advisory capacity to the Board and any recommendations made by the Committee shall not be binding on the Board or on the Company. In the event that the Board decides not to follow a recommendation of the Committee, the Company shall promptly inform the Bank of England.

More information on the Committee’s duties can be found in the Terms of Reference:

Terms of Reference (PDF)

The Nomination Committee is composed of a maximum of five individuals, with a majority of independent non-executive directors. The Board shall appoint the chair of the Committee from one of the independent Non-Executive Directors.

Nomination Committee - Terms of Reference (PDF)

The primary purpose of the Remuneration Committee is to maintain oversight of, consider and approve policies and frameworks covering remuneration for LME Clear’s (“the Company’s”) employees. In doing so, the Committee will uphold the interests of the Hong Kong Exchanges and Clearing Limited group (“the HKEX Group”) and at the same time recognise the interests of other relevant stakeholders of the Company.

The Committee shall represent the remuneration needs of the Company to the HKEX Group Remuneration Committee when considering the overall remuneration of the HKEX Group and shall operate within the parameters agreed with the HKEX Group Remuneration Committee in the performance of its duties under its terms of reference.

The Remuneration Committee’s duties include considering, agreeing and recommending to the Board the remuneration policy for the Company; overseeing the implementation of that policy by management; and reviewing its operation on an ongoing basis. The Committee, as a committee of the Board, operates under the terms of the "Remuneration Committee - Terms of Reference (PDF)" adopted by the Board of LME Clear.

At least annually – having regard to the views of shareholders and other stakeholders – the Committee shall review the Company’s remuneration policy in order to reasonably examine and satisfy itself that the policy (among other things):

• is consistent with and promotes sound and effective risk management;
• is clearly aligned with the Company’s long term strategic objectives, vision, culture and values.

Charity Committee Terms of Reference