LME CEO says exchange hasn’t discussed CFTC-style reporting

The London Metal Exchange hasn’t discussed whether it should adopt commitment of traders reports similar to the U.S. Commodity Futures Trading Commission.

“It has not even been discussed,” Garry Jones, chief executive officer of the LME, said in an interview in London today. The bourse will review its options and then decide, he said.

The LME may start publishing reports on futures trading positions from next year after directors review the plans later this month, the Financial Times reported today, citing unidentified people familiar with the plan. Aluminum producers and consumers have urged the London bourse to start reporting similar to the CFTC’s.

The LME publishes so-called warrant holdings reports that don’t reveal the type of holder of a position and are delayed by two days. The U.S. CFTC releases weekly reports breaking down positions by type and NYSE Liffe, the derivatives arm of NYSE Euronext, began giving similar information for agricultural products in 2011. ICE Futures Europe started publishing Commitment of Traders Reports in Europe for Brent crude and gasoil in 2011.

Aluminum makers including United Co. Rusal, Alcoa Inc. and Norsk Hydro ASA have urged the LME to boost transparency by disclosing trader holdings. A user group which includes the Washington-based Beer Institute and American Beverage Association last month also called for the LME to introduce the reports.

170 Million Contracts

The LME, bought by Hong Kong Exchanges and Clearing Ltd. for $2.2 billion last year, consulted market participants until Sept. 30 on a plan to ease year-long backlogs of metal at its warehouses. A total 170 million contracts, equal to $15 trillion and 4 billion metric tons of metals, changed hands at the LME in the past 12 months, Diarmuid O’Hegarty, deputy chief executive officer, said at the LME metals seminar in London today. The bourse is on track for a record year, he said.

The exchange moved from a “constrained-profit” model to being “a division of a commercial enterprise with global reach,” Jones said at the seminar.

“The exchange has to change over that period and it’s in the middle of that change right now,” Jones said. “The members are very important in the transmission mechanism but the consultation and the needs of the industry are broader all the way along that spectrum. And I think you will see much more engagement from it right across the value chain.”


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