September 29, 2014
LME announces new fee schedule
* Tariff simplified to give all-in transaction fee in a single currency
* Discounts offered for some trade types, including Ring trades
* Supports continued investment in IT, systems and service provisions
The London Metal Exchange (LME) today announces a new fee schedule to support the ongoing programme of investment which is transforming the business. The new simplified tariff provides an all-in transaction fee with trading and clearing components, all now charged in USD, thereby aligning Exchange fees with the currency of the contracts traded. The tariff comes into effect on 1 January 2015.
The average LME transaction fee (including trading and clearing) will increase by 34%. Following the purchase of the LME by Hong Kong Exchanges and Clearing Limited (HKEx) in 2012, significant financial commitment has already been made in the LME and LME Clear businesses. The changing regulatory environment and necessary system upgrades have called for substantial investment, which is set to continue as the LME expands its user base, launches new products and enhances its services for the global metals markets.
“Our new tariff is integral to our evolution into a truly commercial global exchange and underpins our continued investment and our next phase of expansion following the successful launch of LME Clear last week,” said Garry Jones, LME CEO and HKEx Co-Head of Global Markets. “The new LME tariff is competitive and ensures we can continue focusing on innovation and offering users the highest levels of service.”
“The introduction of a new LME tariff is a necessary step towards realizing our vision of building a leading global, vertically integrated multi-asset class exchange group,” said Charles Li, Chief Executive of HKEx. “An increased revenue stream for the LME will deliver better systems, more flexibility for users and more products tailored to meet the changing needs of market users.”
The new fee structure simplifies and levels out the transaction fees across the LME user base. The tariff also includes a significant discount on trades transacted on the Ring, which reaffirms the LME’s commitment to the trading floor and recognises its vital role in the price discovery process. Recognizing the ongoing feedback from the membership the LME has reduced the fee for member-to-member give-ups in absolute terms, and short-dated client carry trades continue to receive a discount in the new fee schedule. The LME Clear fee remains unchanged.
The new LME fee structure can be found at LME Fees and Charges Schedule
* A give-up trade is where one broker enters into a contract with a customer which is then given up by that broker to another broker nominated by that customer.
* A carry trade is the simultaneous purchase and sale of the same tonnage of the same metal for delivery on different dates. A short-dated carry is where all carry dates are between the “Tom” date (next LME business day) and 15 calendar days forward from the “Tom” date inclusive.
LME Prices (US$/tonne) for 26 September 2014
Aluminium alloy 2,085.00
Steel billet 450.00