London Metal Exchange will proceed with its proposed
warehousing policy changes, aimed at cutting queues for metals,
despite aluminum producer United Co. Rusals (UC
Rusals) challenge to the plan.
The LME has been named
as a defendant in a judicial review claim issued by
Moscow-based UC Rusal and filed Dec. 23 in the English High
Court, LME owner Hong Kong Exchanges & Clearing Ltd. (HKEx)
said Dec. 24.
The judicial review
seeks to challenge the LMEs decision to shorten 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 (
amm.com, Nov. 7).
The LME plans to
implement the proposal April 1.
"Rusal has alleged
that the consultation conducted by the LME was unfair and
procedurally flawed, that the LMEs changes to its
warehousing policy are irrational and disproportionate, and
that Rusals human rights have thereby been breached,"
HKEx said. "LME management considers that the grounds of
Rusals complaint are without merit and will defend any
judicial review proceedings vigorously."
decision was made after a three-month market consultation
commenced in July regarding changes to its policy on the
load-out rates of LME-approved warehouses, the bourse said.
In a separate
statement, HKEx said it has transferred its regulatory powers
and responsibilities over UC Rusal to Hong Kongs
Securities and Futures Commission as a consequence of the
judicial review proceedings against the LME.
A version of this
article was first published in AMM sister publication Metal