LME Under Scrutiny By FCA And Bank Of England Over Recent Nickel Turmoil

  • The U.K.’s Financial Conduct Authority and Prudential Regulation Authority (PRA), part of the Bank of England, to investigate the LME’s approach to its suspension and resumption of the nickel market in the wake of a short squeeze that sent prices soaring and resulted in the cancellation of trades, reported Bloomberg.
  • RelatedNickel Turmoil Saga Continues With Another 15% Limit-Up Spike On LME: Bloomberg
  • LME plans to start an independent review into the events that led to the suspension of trading in the nickel market. The FCA and PRA said a third party would review the situation once the market settled down.
  • Regulators will be engaging with traders caught up in last month’s market chaos “to assess the effectiveness of their risk management and governance during the period.”
  • LME CEO Matthew Chamberlain and Adrian Farnham, boss of LME Clear, which oversees the settlement of trades, stated, “The events leading up to the suspension and resumption of Nickel trading were unprecedented. The LME fully recognizes the impact of these events on a broad spectrum of market participants and understands that not all participants agreed with the course of action undertaken. The LME sought to act in the interests of the market as a whole and acknowledges the concerns expressed by some market participants.”
  • Also Read: Will chaos in nickel prices disrupt the EV boom?
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