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London Metal Exchange announces fees hike for 2020

By Francis Jay

From January, the Hong Kong-owned exchange is increasing its trading and clearing fees

The London Metal Exchange (LME) will raise core trading and clearing fees by eight per cent in January, the first hike in five years.

The cost of an over-the-counter booking fee will also increase, from $1.00 to $1.14 per lot.

The LME says the increase mirrors the compound rate of inflation since 2015, and will allow the 142-year-old exchange to continue to invest in core technologies and market development.

LME’s owners – Hong Kong Exchanges and Clearing Ltd (0388.HK) – bought the institution for £1.4 billion ($1.79 billion) in 2012, but were forced to scale back fee increases in 2015 after a backlash from members.

The LME – the world's largest market in options and futures contracts on base and other metals – says that the current fee schedule reflects both its “significant” investment in infrastructure, functions and business development, and the increased costs of regulatory compliance.

Matthew Chamberlain, LME Chief Executive, said in a statement: “Since our fee recalibration exercise in 2017, where we implemented significant discounts, we have begun to invest in a number of key areas of the business, which – along with inflationary impact – has led, in our view, to a fair and proportionate new fee schedule. We are announcing the schedule two months in advance of its implementation in order to give members and clients timely visibility of the changes.”

The fee increases have been applied consistently across the different classes of trading and clearing fees, and will come into effect on January 1.

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