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UK watchdog may not probe LME cancelled nickel trades -lawyers
The tight remit of Britain’s Financial Conduct Authority (FCA), which declined to comment on the issue, may anger investors who said they lost huge amounts of money through the cancellations.
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The 146-year-old exchange stopped nickel trading at 8:15 a.m.
“It does look from the statement that the FCA is not going to look at the cancelled trades,” said a regulation lawyer.
. Both declined to be identified.
The LME faces lawsuits from U.S. hedge fund Elliott Associates and Jane Street Global Trading, which are suing the exchange for $456 million and $15.3 million, respectively, for the cancelled nickel trades.
“Neither the Bank of England or the FCA have been clear about whether the LME should have cancelled the trades,” said Harold de Boer, managing director at investment firm Transtrend.
“If they approved the cancelling of trades, that would be a scary precedent.”
Reporting by Eric Onstad; Editing by Kirsten Donovan
Our Standards: The Thomson Reuters Trust Principles.
The FCA has started an “enforcement investigation” into LME conduct and systems and controls in the period between Jan. 1 2022 and the time of suspension on March 8, 2022, the UK watchdog said on Friday.
The watchdog confirmed this is the first time it has launched such an investigation against an exchange.
VOLUME CRASH
UK-based GCH will launch a physical nickel trading platform by the end of March.
Around 50% comes in the form of nickel pig iron which cannot be delivered against the LME’s contract.
(Reporting by Pratima Desai; editing by Veronica Brown and Susan Fenton)
