Under the UK retained version of the EU Markets in Financial Instruments Regulation (UK MiFIR) pre-trade transparency requirements, we are required to make public current bid and offer prices and the depth of trading interests at those prices which are advertised through our systems.
Throughout 2019 we worked with market participants towards implementing a solution to address pre-trade transparency for the inter-office market. In October 2020 we confirmed in notice 20/217 (PDF) that we would implement a “systematic fixed price auction” (SFPA) with an implementation date of 30 November 2020.
We have published a LME pre-trade transparency information pack, designed for members and their clients as well as a list of frequently asked questions (FAQs).
Trading on the LME can be conducted through three different venues: the Ring, electronically through LMEselect or on the inter-office telephone market. There are no limits (minimum or maximum) on the size of trade that can be carried out on any of the venues.
The transparency regime, which forms part of the broader set of requirements under the UK MiFID framework, substantially expands the pre-trade and post-trade transparency regime for financial instruments traded in the UK. The regime is composed of two core transparency obligations, namely: (a) pre-trade transparency: designed to provide market participants with near real-time broadcast of basic trade data around firm quotes; and (b) post-trade transparency: designed to provide market participants with near real-time broadcast of basic trade data around executed trades. The UK MiFID aims to push more trading onto trading venues, thereby minimising “dark pools” of liquidity.