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UK regulator fines London Metal Exchange for nickel futures blowup
By Elliot Gulliver-Needham
City AM, London
via MSN, Redmond, Washington
Thursday, March 20, 2025
The Financial Conduct Authority handed a landmark L9.2 million fine to the London Metal Exchange after it failed to prevent extreme volatility in the nickel market in March 2022.
In its first enforcement action against an investment exchange, the FCA criticised the exchange's systems and controls that did not ensure "orderly trading under conditions of severe market stress."
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The London Metal Exchange decided to scrap billions in nickel trades in March 2022, after fears around the Russian invasion of Ukraine sent metal prices rocketing.
Prices more than doubled during the morning of March 8, 2022, to over $100,000 (£77,000), with most of the rise occurring in just an hour.
"These events undermined the orderliness of and confidence in the London Metal Exchange's market," the watchdog said, adding that the exchange's processes for escalating unusual or hazardous market conditions to managers "were inadequate."
During the exchange's Asian trading hours, from 1 to 7 a.m. in the UK, the FCA said, only "relatively junior trading operations staff" were on duty and they had not been trained to recognise all potential causes of a disorderly market. ...
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GATA is grateful to these companies for their recent support:
Apollo Silver Corp.
Barksdale Resources
Dolly Varden Silver Corp.
Dryden Gold Corp.
Group Eleven Resources
Guanajuato Silver
IBK Capital Corp.
Independent Trading Group
Mining Discovery
Power Nickel
Silver North
Strike Point Gold
The National Investor
The Prospector
Western Alaska Minerals
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