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LMEselect Policies

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The LME has adopted a series of binding policies for all LMEselect participants. It is important that all online traders on the LME are familiar with these policies and also aware that these policies can change. Full Details are available from the LME Helpdesk Trading Desk.

These policies may be subject to change. For a full list of up to date LME policies please visit the LME website.

The following are some of the more important policies:

Order to Trade Ratio Policy

The LMEselect Order to Trade Ratio Policy was originally implemented as a control mechanism for LMEselect to protect it from high volumes of orders. With effect from 28 April 2014 the Order to Trade Ratio Policy for trading full size contracts on LMEselect has applied to each individual market participant (member user or member client); The LME’s order to trade ratio calculation will include the following order actions: Enter, Modify, Inactivate, Reactivate and Cancel.

Good Till Cancelled (GTC) orders will only be included within the ratio on the day of order entry; all subsequent GTC order reloads by the LMEselect application will not be included within the Order to Trade Ratio Policy. However, any modifications to GTC orders during the trading day will be included in the order to trade ratio figure. Any market participant who submits 50,000 or more order actions on a trading day between 00:45 and 19:00 will be subect to the following ratio trigger.

A fee of £10,000 will be charged to the relevant member in respect of any LMEselect FIX client or GUI user that exceeds a ratio order to lots generated of 50:1 as an average via a single FIX key or aggregated across two or more FIX keys during a trading day (00:45 – 19:00). The exchange will waive the fee for the first event each month.

Where a client accesses the LMEselect platform through multiple FIX keys the client’s unique identifier will be used to aggregate that client’s activity for the purpose of calculating the order to trade ratio figures.

Berkeley can assist traders to manage and apply the Order to Trade Ratio Policy.

Message Throttling Policy

This limits the maximum number of order entry/updates that can be executed in any single second for each individual connection to 40 per second. Order entry/updates that exceed the limit are queued by the system and smoothed over subsequent seconds.

The LME policy on throttling gives an example of a burst of 80 order entry/updates in one second where only the first 40 instructions would be accepted in the one second with the remaining instructions being smoothed in the next second.

The LME will not accept responsibility for missed opportunities from order smoothing implementing this policy.

Error Trade Policy

The LME has an error trade policy on LMEselect where a party or an observer to a mistake can request the LME Helpdesk to review the possible erroneous trades. The LME does have the right to adjust any trade on LMEselect if it deems it necessary.  Such requests must come from LMEselect Participant compliance officers or a dealer.

Suspension of Trading

The LME has the power to suspend trading at its sole discretion.  LMEselect Participants are notified through a Market Message, via email and their website. If trading is suspended, all unmatched active orders in LMEselect are automatically withdrawn and no new orders are accepted. This policy also applies to GTC orders.

On re-opening of LMEselect there is a 15-minute pre-opening session to enable the management of orders before commencement of trading.

Content has been provided courtesy of the London Metal Exchange

5 Things You Should Know When Using LMEselect orLMEselect APIs

Any market participant who submits 50,000 or more order actions on a trading day needs to be aware of the Order to Trade Ratio. Order actions include entering, modifying, reactivation, inactivating and cancelling.

Trading hours for the LMEselect are 01:00 – 19:00 Monday to Friday (UK time).

All LME select client orders are subject to appropriate pre-trade risk controls. These are Compulsory Controls required by the Exchange.

The LME, in order to protect the integrity of the market, reserves the power on its own initiative to cancel an LME Select trade, and, if necessary, replace it with an identical trade (but modified price) if it determines, in its absolute discretion, that the trade was a clear or serious error. For more information, please go to  http://www.lme.com/

LMEselect can only be provided by LME membership categories 1, 2, 3 & 4. Berkeley Futures is a category 4 member and can offer LMEselect via a third party applications such as Patsystems, Trading Technologies (TT), CQG and FFastfill.

Get assistance in maintaining your trade ratio and avoiding breach of rules.