The London Metal Exchange (LME) and LME Clear have announced a competitive fee schedule for their precious metals contracts, with nine LME clearing members having already expressed their intention to trade and clear the contracts.
The LME developed the LMEprecious fee schedule together with its partners – the World Gold Council, Goldman Sachs, ICBC Standard Bank, Morgan Stanley, Natixis, OSTC and Societe Generale – following discussions with a broad range of potential new users of the contracts.
“We believe that our trading and clearing fees for LMEprecious are price leading in the precious trading and clearing space, which we expect will assist in boosting liquidity in the early stages following launch,” says Kate Eged, head of precious metals at the LME.
Combined trading and clearing fees for T+1 (tom), T+2 (spot) and monthly contracts executed electronically range from USD0.40 to USD0.90, with a 25 per cent discount for telephone trading and further reductions for tom/next carry trades.
The LME’s five partner banks will be ready to trade and clear the LMEprecious contracts from launch. In addition, since announcing the initiative, four more members (listed below) have expressed their intention to trade and clear the contracts, which involves contributing to a separate default fund. Several more clearing members are expected to sign up prior to launch and many other precious market participants are looking to take advantage of the LMEprecious non-clearing membership (NCM) option.
“We are delighted that these four additional members have expressed their intention to trade and clear LMEprecious contracts, which can only be viewed as an encouraging sign for their future success,” says Matthew Chamberlain (pictured), LME interim CEO.
Adrian Farnham, CEO of LME Clear, says: “We look forward to welcoming more clearing members leading up to launch, which will further facilitate client access to the contract suite.”