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Warehouse reform 2019-2020

Warehousing

On 29 March 2019, the LME released a discussion paper, outlining a number of proposals put forward by both the LME Warehousing Committee, and the LME itself, in respect of possible reforms to its global physical network.

These reforms were designed to ensure that the LME network represents best practice for physical market infrastructure storage and logistics. On the basis of the feedback received to the discussion paper, and the LME’s own analysis, the LME launched a market-wide consultation on those items in the discussion paper which it believed represented positive progress for the LME warehouse network. Further, the LME also consulted on a number of other proposals which were not included in the discussion paper, but on which the LME believed further action was appropriate.

Following careful consideration of the responses, the LME decided to implement all of the consultation proposals, as they were set out in the consultation. The consultation proposals took effect on 1 February 2020, with the exception of CP15 (in relation to the Complaints Procedure), which took effect on 15 November 2019.

Overview documents

Overview presentation on warehouse reform (PDF)

Post reform policy documents

Consultation on warehouse reform: feedback analysis (PDF)

LME Policy on Approval and Operation of Warehouse (PDF)s

LME Policy on Approval of Locations as Delivery Points (PDF)

LME Warehouse Agreement (PDF)

LME Complaints Procedure (PDF)

Latest steps (July 2020)

On 9 July 2020 the LME published its first set of summary statistics of off-warrant stocks, designed to deliver increased transparency of global metal availability. The obligation for warehouses to report metal subject to an LME Off-Warrant Storage Agreement was introduced in LME Decision Notice 19/347, following a consultation in 2019.

Press release - LME starts publishing off-warrant stocks data
Member notice - 20 172 Publication of Off-Warrant Stock Reports (PDF)

Consultation results (November 2019)

On 1 November 2019, the LME released the results of its consultation on warehouse reform, which closed on 12 September 2019. 13 written responses were received and the LME has published a feedback analysis report which provides a summary of those responses and the LME’s own analysis.

Subsequent to the above announcement, the LME released minor amendments to the LME Warehouse Agreement and LME Policy on the Approval and Operation of Warehouses as set out in notices 19/419 (PDF) and 20/022. 

Supporting documents

Press release: LME proceeds with warehouse reform proposals

Consultation (July 2019)

On 25 July 2019 the LME launched a market-wide consultation (PDF) on proposals put forward in the warehouse reform discussion paper (PDF), which it believes represent positive progress for the LME warehouse network.

The LME is also consulting on a number of other proposals which were not included in the discussion paper, but on which the LME believes further action is appropriate. These proposals broadly fall into three main categories:

  1. Logistical optimisation
  2. Transparency and compliance
  3. Rebalanced rules and a pathway to simplification

The consultation is open until 12 September 2019 and the LME welcomes feedback from all market participants and other interested parties, including regulatory and governmental bodies.

The Consultation and its associated appendices can be found here (PDF).

For ease of reference, the full set of documents contained in the Consultation are set out individually below:

Consultation on warehouse reform (PDF)

Appendix A: LME Policy on Approval and Operation of Warehouses – redline (PDF)

Appendix B LME Policy on Approval and Operation of Warehouses clean (PDF)

Appendix C: LME Policy on Approval of Locations as Delivery Points – redline (PDF)

Appendix D LME Policy on Approval of Locations as Delivery Points clean (PDF)

Appendix E: LME Warehouse Agreement – redline (PDF)

Appendix F: LME Warehouse Agreement – clean (PDF)

Appendix G: LME Complaints Procedure – redline (PDF)

Appendix H: LME Complaints Procedure – clean (PDF)

Supporting documents

LME warehouse reform consultation overview (PDF)

Press release: LME opens consultation on warehouse reform proposals

Discussion Paper on LME Warehouse Reform (March-May 2019)

In March 2019 the LME published a discussion paper on warehouse reform which covered three key areas:

  1. Strategic proposals from the LME Warehousing Committee
  2. Operational proposal from the LME Warehousing Committee
  3. Additional proposals put forward by the LME

The Consultation launched in July 2019 builds on the strong market feedback received in respect of the discussion paper. The LME’s analysis of this feedback can be found in its feedback analysis report (PDF).

Supporting documents

Discussion Paper on LME Warehouse Reform - March 2019 (PDF)

Overview of Discussion Paper on LME Warehouse Reform - March 2019 (PDF)

Press release: LME launches discussion paper on potential warehouse rule enhancement

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