Insignia Consultants | LME fined for failing to hit the brakes in nickel crisis
LME fined for failing to hit the brakes in nickel crisis
LONDON, March 24 (Reuters) - The venerable 148-year old London Metal Exchange (LME) has just made it into the history books for the wrong reasons by becoming the first British trading exchange to be fined by a regulator.
The Financial Conduct Authority's (FCA) imposition of a 9.2 million pound ($11.9 million) penalty draws a line under the 2022 nickel crisis, which resulted in the eight-day suspension of the LME nickel contract and the controversial decision to cancel trades.
It could have been much worse had the LME, owned by Hong Kong Exchanges and Clearing Ltd (0388.HK), opens new tab, not successfully fought off claims for far higher sums in the courts.
But the FCA's final report, opens new tab makes damning reading and on a scale of nought to five the regulator classified the LME's failures as a level 3 breach of rules around orderly trading.
The original penalty was set at 14.7 million pounds, equivalent to 10% of exchange revenue, but reduced for mitigating factors and early acceptance of the FCA's findings.
