The London Metal Exchange (LME) has published its first Commitments of Traders Report (COTR) in response to general market demand for broader transparency.
The COTR is designed to reflect the nature of the predominant business activity that LME members and their clients are involved in.
“We are committed to providing the broadest possible market transparency for the metals industry,” says Nick Ong-Seng, managing director of regulation and compliance at the LME.
“As such we have endeavoured to produce a report in line with the industry standard, which reflects as accurately as possible the breakdown of open interest in contracts traded on the LME, summarised in five discrete classifications.”
“The publication of these reports represents a key deliverable requested by the physical industry following the LME's 2013 warehousing consultation,” says Matthew Chamberlain, the LME’s head of business development. “The reports demonstrate the strong participation of those producers, merchants, processors and users in the LME's ecosystem – both holding open interest directly as clients, but also to a large extent through broker-dealers, much of whose open interest relates to netted physical client business.
“The COTR data reflects the LME's target business model – namely a price underpinned by the core involvement of the physical market hedging their risk, with liquidity enhanced by the participation of the broader financial community.”
The COTR will be published on a weekly basis and will consist of a report for each business day of the previous week.
