UK authorities launch investigation into LME for suspending nickel trading in 2022
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UK Financial Conduct Authority (FCA) announced launching an investigation into the London Metal Exchange (LME). It is associated with suspension trading in nickel on the exchange on March 8, 2022.
“The FCA has reviewed developments related to the suspension of trading in nickel and has begun reviewing some of the LME’s actions and systems and controls in place between January 1, 2022 and the suspension of trading on March 8, 2022,” the regulator said in a statement.
The LME suspended trading in nickel in March 2022 due to an “unprecedented” increase in the metal’s price. March 8 nickel price for the first time exceeded $100,000 per ton, having risen by $72,000 in the first week of the month. The surge in nickel prices was provoked by events in Ukraine. The largest nickel producer in the world is the Russian Norilsk Nickel.
As a result, trading in nickel on the LME was frozen for more than a week. It was the first suspension of trading on the LME metal since 1985, when the London Stock Exchange halted trading in tin, exposing a cartel.
In April last year, the UK FCA and the Bank of England announced that they would review the LME’s activities in connection with the decision to stop trading in nickel.
The FCA said in today’s announcement that the LME has made a number of changes to its oversight system and is committed to reforms based on recommendations from regulators. Nevertheless, the management decided to conduct an investigation to establish the chain of events and the reasons for the suspension of trading.
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