Membership categories

Membership categories

The London Metal Exchange (LME) has seven categories of membership each with its own criteria and capabilities.

Category 1

These members have the exclusive right to trade LME Contracts by open outcry in the Ring, in the telephone market and on LMEselect and are entitled to issue Client Contracts to their clients. As clearing members, they are permitted to clear trades on their own behalf and on behalf of their clients and, as a result, must be members of the Clearing House.

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Category 2

These members are clearing members and are permitted to trade LME Contracts in the telephone market and on LMEselect and issue Client Contracts. As clearing members, they are permitted to clear trades on their behalf and on behalf of their customers and, as a result, must be members of the Clearing House.

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Category 3

These members are clearing members and are permitted to trade LME Contracts in the telephone market and on LMEselect but are not permitted to issue Client Contracts, being proprietary traders. As clearing members, they are permitted to clear trades on their own behalf only and, as a result, must be members of the Clearing House. 

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Category 4

These members are not clearing members and must appoint a designated clearing member to clear trades on their behalf. These members are permitted to trade Client Contracts in the telephone market and on LMEselect and are permitted to issue Client Contracts.

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Category 5

These members may be customers of Category 1, 2 or 4 members, in which case they receive Client Contracts but are not permitted to issue them, or they may be physical market participants who wish to be associated with the LME brand. Category 5 members are not required to be regulated.

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Category 6

Individuals within the industry who wish to be close to the LME community in particular.

Category 7

An honorary membership conferred on individuals at the discretion of the Directors.

LMEprecious

LMEprecious members may trade LME Gold and Silver contracts on LMEselect or the Inter-Office Market, on behalf of themselves or on behalf of Clients.

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Regulatory Requirements:- Category 1, 2, 3 and 4 members must be regulated by the UK Financial Conduct Authority, a competent authority of an EEA State or benefit from an exclusion under the Financial Services and Markets Act 2000 (Regulated Activities) Order (“RAO”).

Category 4 members wishing to issue LME registered client contracts to customers will need to demonstrate applicable regulatory authorisations.

Membership
category
Cat 1 Cat 2  Cat 3  Cat 4  Cat 5
Trade in the Ring  Yes  No  No  No  No
Trade on the telephone market  Yes
 Yes  Yes  Yes  Yes
Trade directly on LMEselect  Yes  Yes  Yes  Yes  No
Issue LME Client Contracts   Yes  Yes  No  See note 1  No
Demonstrate applicable authorisations, exclusions or exemptions for proposed LME activities  Yes  Yes  Yes  Yes  No
LME Clear member  Yes  Yes  Yes  No  No
Minimum net worth  £5m  £5m  £5m  £500,000  £50,000
Annual subscription fee (ex VAT)  $95,000  $90,000  $30,000  See note 2  $4,000
Minimum B shareholding  25,000  25,000  5,000  2,500  No B shares

Note 1 - Category 4 (broker) members wishing to issue LME Client Contracts to customers will need to demonstrate applicable regulatory authorisations. 
Note 2 - Category 4 members operating a proprietary trading model will incur annual subscription fees of $30,000 per annum: Category 4 members who execute/issue LME  Client Contracts for customers will incur annual subscription fees of $75,000.

Contact us

For further information please email our Client Advisory team.