NEW YORK The
United Kingdoms financial regulator has given its tacit
backing to the London Metal Exchanges rule changes by
ensuring they are consistent with the exchanges
"We have engaged with
the LME to ensure these changes, including the linked load-in
and load-out rule, are consistent with its regulatory
obligations," the Financial Conduct Authority (FCA) said. "We
see these measures as a first step toward strengthening the
LMEs warehousing arrangements and increasing the
transparency of its market."
comments came in response to the LMEs formal announcement
that it has shortened the limit on the length of queues it will
permit at individual warehouse locations to 50 days from a
100-day limit proposed in July.
In sweeping new rules
announced Nov. 7, the LME also said it would take action to
prevent queue incentivization and introduce a number of other
recommendations proposed by stakeholders during a three-month
consultation on its proposals.
The LME is obligated
as a recognized investment exchange to ensure that approved
warehouses "provide effective and efficient services for the
receipt, holding and delivery of metal related to the trading
of LME contracts," the FCA said. "We will continue to engage
with the LME and other stakeholders to monitor the impact of
all the measures announced by the LME."