On Sep. 18, UK LME reported increased requirements for listed firms.
UK LME reported on capital adequacy and insurance for listed warehouse companies.
Increase in Capital Adequacy and Insurance
The minimum capital adequacy requirements for UK LME-listed warehouse companies will increase to £5 mn, and minimum level of insurance indemnity required to £1mn.
UK LME received feedback from market participants to support increasing both capital adequacy and insurance requirements for warehouse companies.
This follows the bankruptcy of a warehouse company in 2016 and an incident in which irregularities were identified in respect of bagged nickel briquettes in 2023.
These events would also support introduction of increased requirements by UK LME.
Effectiveness
UK LME stated that those affected satisfy new capital requirements by Dec. 31, 2024.
Warehouse companies will have until Dec. 31, 2024 to ensure that they meet the required increased level of indemnity insurance for 2025, with revised requirement.
This will apply to each calendar year thereafter, and warehouse companies will need to evidence that they have satisfied the increased level of indemnity insurance to £1mn.
Specifically, when they submit their annual confirmation of insurance in early 2025.
New applicant warehouse company will be required to satisfy the increased level of indemnity with immediate effect, as set out by UK LME in this notification.
