Market regulation

The Exchange provides the environment for trading and regulates the operation of the market. It has a statutory requirement to ensure that business on its markets is conducted in an orderly manner, providing proper protection to investors.

Approved as a recognised investment exchange (RIE) and conforming with UK and other international regulatory requirements, the LME offers, through price and volume transparency and audit trails, a legally safe forum for metals trading. As an RIE, the Exchange comes under the direct jurisdiction of the UK Financial Conduct Authority (FCA) and is an exempt person for the purposes of the Financial Services and Markets Act 2000 in respect of its exchange activities.

From 3 December 2019, the LME is also authorised and regulated by the Financial Conduct Authority in respect of its benchmark administration activities under the European Benchmarks Regulation.

Regulation of the market is largely carried out by the LME, while the majority of members' business is regulated by the FCA or their home regulator.

Beyond this, both the Exchange and its members are subject to regulatory controls and input from various UK bodies and government offices, as well as EU directives. In international trading, rules applied by overseas regulatory bodies such as the US Commodity Futures Trading Commission (CFTC) also have to be taken into account.

Arbitration at the LME is undertaken by the arbitration committee with the purpose of settling member-to-member disputes.

European Benchmarks Regulation
The European Benchmarks Regulation (BMR) is a wide-reaching European regulation that applies a common framework to the regulation of benchmarks. This section of the website provides further information about the status of the LME’s prices under the BMR. BMR benchmark statements and methodologies are also available on this section of the website.

The Markets in Financial Instruments Directive came into force on 3 January 2018 and has introduced a harmonised pan-European legislative framework to govern and regulate financial markets.

Rules and regulations
The LME employs a published set of rules and regulations which form the basis of sustaining an orderly market, membership criteria, committees, and disciplinary procedures.

The London Metal Exchange and LME Clear are working to ensure a smooth transition as the United Kingdom withdraws from the European Union.