UK LME Matching Rules on Carry Trades

Published on: Jan 17, 2025

On Jan. 13, UK LME reminded of rules on trades chronologic ordering.

  • UK LME published Notice 25/009 entitled Matching Rules Relating to Chronologic Leg Ordering of Carry Trades, reminding members of steps required to ensure compliance.
  • Follows UK LME Apr. 2024 detailed penalty notice, fixed penalty offense, see #207063.
  • Notice Summary
  • Notice reminded members of Matching Rules in relation to chronological leg ordering of carry trades entered in LMEsmart, and sets out steps to ensure compliance with Rules.
  • Under Paragraph 10, when submitting carry trades the Matching System, members must enter near leg first, followed by all other legs in chronological Prompt Date order
  • The Notice confirmed basis under which some actions are breaches of Matching Rules.
  • Fixed Penalties
  • As part of this process, UK LME reminded members fixed penalties will start applying to Carry trade submissions with incorrect chronological leg ordering as of Mar. 3, 2025.
  • This follows Notice 24/135, dated Apr. 2, 2024, when UK LME set out conduct which would constitute a Fixed Penalty Offence and that is therefore subject to fixed penalty.
Regulators
UK LME
Entity Types
B/D; Exch; FCM
Reference
Nt 25/009, 1/13/2025; Nt 24/135, 4/2/2024
Functions
Compliance; Financial; Legal; Operations; Risk; Settlement; Trade Reporting; Trading; Treasury
Countries
United Kingdom
Category
State
N/A
Products
Clearing; Commodities; Derivatives; Fixed Income; Futures; Loan
Rule Type
Final
Regions
EMEA
Rule Date
Jan 13, 2025
Effective Date
Mar 3, 2025
Rule ID
240219
Linked to
Reg. Last Update
Jan 13, 2025
Report Section
UK