HOTLINE: LME doubles fines for ring-dealing offences

From January 5, the London Metal Exchange will increase by at least 100% the fines its ring disciplinary committee can impose for dealing offences seen during open outcry trading.

From January 5, the London Metal Exchange will increase by at least 100% the fines its ring disciplinary committee can impose for dealing offences seen during open outcry trading.

In first-offence cases, dealers will face fines of up to £5,000 for failing to follow the LME’s ring-dealing code, double the previous £2,500 maximum fine.

The ring-trading rules prohibit dealers from actions such as bidding above an offer, or vice versa, discriminating in favour of or against another ring-dealer, or making “frivolous” bids or offers in the ring.

Repeat offences are fined on a rising scale, and dealers who commit a fourth offence can now be docked up to £50,000, up from £20,000 previously, and will also be charged 160 penalty points.

The ring disciplinary committee will report any dealer who accrues more than 100 penalty points in three months or 180 points in six months to the ring discipline supervisory panel.

From January 5, the supervisory panel will have the power to impose fines of up to £100,000, compared with the previous £50,000, and can also issue trading suspensions of up 20 business days.

The change has been made to “enhance the scrutiny and governance around the LME’s price discovery procedures” following the exchange’s decision to keep the ring open past January 2015, the LME said in a notice to members on Monday December 22.

Fines for minor offences of an unprofessional nature – including failing to observe the ring’s dress code and slovenly, overzealous or drunken behaviour – will remain unchanged.

For first offences, dealers can be fined up to £500 and have 20 penalty points recorded against them for such minor acts of misconduct.

Other examples of minor offences including selling or displaying non-LME products in the dealing area, using foul and abusive language, and chewing while dealing by open outcry.

In July, the LME fined traders from nine of the ten ring-dealing members £1,250 each for standing during open outcry, in contravention of the rule that dealers must remain seated at all times, and issued further fines to a smaller number of dealers who committed additional offences.

To avoid falling foul of the no-standing rule, ring-dealing traders can often be seen stepping into the ring with a front leg while keeping their back foot resting on their seat, in an idiosyncratic stance which, over time, has come to fall within the LME’s definition of ‘sitting’, at least where the application of the rule is concerned.

What to read next
The publication of Fastmarkets’ manganese ore seaborne indices for Friday March 31 was delayed due to inputting errors in the data submission process.
As of May 1, 2023, Fastmarkets will improve the foreign exchange (FX) spot rates published on the Fastmarkets Dashboard and in the Scrap Settlement PDF.
European energy analysts’ “what if” questions have turned into “what now” questions in the wake of Russia’s stalled war efforts against Ukraine
Despite the metal being classed as “strategic” in the European Union’s proposed Critical Raw Materials Act (CRMA), questions remain about the future of magnesium supply in Europe, market participants have told Fastmarkets
The publication of Fastmarkets’ assessment of the Southeast Asia copper premium for Tuesday March 28 was delayed due to a scheduling error.
Recycling is increasingly being considered the best way to reduce carbon emissions from metals production, and huge investment in recycling facilities has been seen in recent years, with robust merger and acquisitions activity
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.