LME Clear has an enhanced collateral service that allows members to pledge LME warrants against their margin requirements.This is a unique offering from LME Clear – the clearing house purpose-built for the metals market.
The Warrants as Collateral service provides improved efficiency for the LME marketplace, and, in certain circumstances, serves as a natural hedge against cleared positions. Using LME warrants as collateral may also allow members to optimise assets on their balance sheet in a more cost effective manner.
Key points to note
LME Clear accepts warrants as collateral for underlying metal held in the following warehouse locations:
- England and Wales
- South Korea
Warrants of a metal can only be accepted as collateral for the underlying metal (i.e. Aluminium warrants will be acceptable as collateral to cover Aluminium positions) and members are not permitted to post LME warrants which relate to underlying metal located in their jurisdiction of incorporation unless the member is incorporated in England & Wales.
Please see the Warrants as Collateral FAQs for further details. Please also refer to LME Clear's EMIR Article 39(7) disclosure statement, available on the disclosure and transparency page.
Fees for the Warrants as Collateral services are set out in the Fee Schedule.