Approved as a recognised investment exchange (RIE) and conforming with UK and other international regulatory requirements, the LME offers, through price and volume transparency and audit trails, a legally safe forum for metal and plastics trading.  As an RIE, the Exchange comes under the direct jurisdiction of the UK Financial Services Authority (FSA). 

Regulation of the market is largely carried out by the LME, while the FSA is responsible for regulating the financial soundness and conduct of LME members' business.

Beyond this, both the Exchange and its members are subject to regulatory controls and input from various UK bodies and government offices, as well as EU directives.  In international trading, rules applied by overseas regulatory bodies such as the US Commodity Futures Trading Commission (CFTC) also have to be taken into account.

To ensure the observance of these regulations, the LME has a compliance department under the supervision of the Executive Director of Regulation & Compliance. 

The exchange has a highly developed policy to regulate the market so that it can carry out its statutory responsibility to ensure orderly markets.  Key features of this policy are set out in the document "Market Aberrations: The Way Forward", published in October 1998.  

LME Rules and Regulations

All LME members are required to comply with the Rules and Regulations of the Exchange.  These come in two forms:

• The LME Rulebook
  
  The LME Online Rulebook can be accessed online from Lexis Nexis. 
  If you wish to purchase a hard copy version of the rulebook, you can do so via the LME Online Store.
  

• Member notices
  
  Member notices issued by the exchange from time to time in relation to regulatory and compliance matters have the same force as rules contained in the LME Rulebook. 
  
  Key compliance notices can be accesssed online.

The LME Online Rulebook available from Lexis Nexis also includes access to the full database of member notices.  Member notices can also be purchased in printed form from the LME Online Store.  

LME Compliance Operation

This LME’s compliance department monitors the market and member positions in order to analyse developments and ensure that the LME is delivery its regulatory responsibilities.   The regulation and compliance department is divided into three divisions to carry out its role of regulating the market. 

These are:

• Market surveillance - whose role is to protect the integrity of the LME's markets by monitoring that trading is fair and transparent
• Member surveillance - whose role is to ensure that the membership is in full compliance with the rules and regulations
• Enforcement – whose role is to investigate and prosecutes rule breaches