Collateral acceptable to cover margin liabilities must be highly liquid with low credit and market risk.
Collateral is tiered based upon credit and liquidity standards and the tiering applied forms part of haircut and limit calculations. Non-Cash collateral is subject to minimum credit standards based upon internal framework and ongoing review. Securities collateral can be posted either on a bi-lateral single ISIN basis or via our Tri-Party Member Margin Collateral service.
Collateral is regularly assessed in terms of market depth and ability to liquidate within holding period in stressed market conditions. Acceptable collateral must be able to be reliably valued on a daily and intra-day basis with sufficient market data to enable the robust management of market risk. Collateral must be denominated in a currency in which LME Clear contracts or which any FX exposure can be risk managed. Acceptable collateral is subject to a robust and transparent limit, haircut and valuation structure and liquidity based limits related to lodgement and withdrawal.
Acceptable collateral for default fund purposes is US dollars Cash (USD).
Complete list of eligible collateral (PDF)
Cash
- US dollar (USD)
- British pound sterling (GBP)
- Euro (EUR)
- Japanese yen (JYP)
- Offshore Renminbi (CNH)
Securities
Bilateral and triparty
- United States
- Germany
- UK
- France
- Netherlands
- Finland
- Japan
Triparty only
- Asian Development Bank
- Caisse D’Amortissement de la Dette Sociale
- Council of Europe Development Bank
- European Investment Bank
- International Bank for Reconstruction & Development
- International Finance Corporation
- Kreditanstalt Fuer Wieferaufbau
- Landwirtschaftliche Rentenbank
- Nordic Investment Bank
- UK Inflation Linked Bonds
- US Inflation Linked Bonds
For more information please see our triparty page.
Allocated gold bullion
- Allocated LBMA gold
Warrants
Warrants are only acceptable on a metal for metal basis – ie aluminium warrants will be acceptable as collateral to cover aluminium positions only.
- High Grade Aluminium
- Copper
- Lead
- Nickel
- Tin
- Zinc
View more information on warrants as collateral
Documents
LME Clear publish detailed information about the collateral limit structure employed. This information is available to member firms who can access the information.