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  • Average trading and clearing fees to rise by 13%, effective 1 January 2024.
  • First trading and clearing fee increases since January 2020, partly offsetting the 23% cumulative inflation of corresponding period.
  • Ring fees and short-dated carry fees frozen, reflecting commitment to physical market.
  • Electronic Volume Programme to be introduced, recognising financial market’s stable liquidity providers, and providing a route to lower fees.
  • Financial OTC Booking Fee to be increased to the same level as on-exchange fees, ensuring a level playing field.

The LME Group today announced its fee schedule for 2024, which will see core trading and clearing fees rise for the first time since 1 January 2020. The new fee schedule reflects the recent inflationary environment as well as the LME’s commitment both to its ongoing investment programme and to providing its stakeholders with a liquid, fair and transparent market.

Trading and clearing fees

The LME Group has assessed each of its categories of trading and clearing fees and will introduce per-category increases of between 0% and 15%, with a blended average increase of 13%. This increase partly offsets the UK’s 23% compound rate of inflation (CPI) over the period since fees were last increased.

Matthew Chamberlain, LME CEO, commented: “Today’s fee increases reflect both current inflationary pressure, but also our ongoing commitment to driving our business and our markets forward. We recognise our customers’ and market participants’ cost pressures, so we have applied a considerably lower-than-inflation rise to this first fee increase in four years. In calibrating the fee changes, we have sought to ensure that Ring and all short-dated carry fees remain flat – supporting and protecting Ring-based Official pricing and our daily date system. Both of these demonstrate our commitment to the physical market, which is at the heart of our business.

“We also recognise the value brought to our market by funds, as evidenced by the growth of our lead contract this year, where increased volumes and open interest have improved liquidity for the benefit of all market participants. We therefore plan to introduce a new volume-based programme with discounted fees for those investors who bring stable and sustainable electronic liquidity flows to the LME. Together with our efforts to improve electronic liquidity on third Wednesday contracts, this highlights our commitment to also reduce execution costs for financial participants on our market.”

The LME’s new Electronic Volume Programme is designed to encourage greater electronic liquidity from the investment community, by providing discounted fees for clients who reach certain volume thresholds. Subject to final approvals, the new programme will also come into effect at the start of January 2024.

Financial OTC Booking Fee

The Financial OTC Booking Fee will be increased to $2.24 to match the corresponding all-in fee paid for a client contract transacted on-exchange. Matthew Chamberlain commented: “While we recognise that OTC trading forms part of the commodities trading landscape, we also believe that it is in the best interests of the market as a whole to create a level playing field between on-exchange and OTC trading that references LME prices or makes use of LME settlement infrastructure, especially given the significant impact OTC trading can have on our market, and its associated cost and risks for the LME.”

The same set of waivers, offsets and discounts will continue to apply to the Financial OTC Booking Fee.

The LME Group will also be raising ancillary and market data fees to account for 2023 inflation, as per previous years.

~Ends~

Notes to editors

  • The LME last increased trading and clearing fees on 1 January 2020 by 8%, mirroring the compound inflation between 1 January 2015 and 1 January 2020.
  • Further details including the impact of the fee change on different trade types can be found in LME Notice 23/200 (LME Clear Circular 23-045).
  • Further information on the Electronic Volume Programme will be provided in due course.
  • In general, financial investors are seeking exposure to the LME’s monthly (third Wednesday) dates. By facilitating direct trading onto these dates, execution costs for financial investors are significantly reduced (compared to trading an outright three-month contract, and then adjusting to a third Wednesday date). Outright third Wednesday volumes on LMEselect have increased by 61% year on year (January- September).

Contact us

For further information or to speak to an LME spokesperson, please contact:

Miriam Heywood
miriam.heywood@lme.com

Andrea Blumire
andrea.blumire@lme.com