LME to Adopt Changes to Channel More Trading to Electronic System

Hong Kong Exchanges and Clearing Limited, the operator of the London Metal Exchange, plans to adopt changes to channel more trading to its electronic system. The changes aim to increase the use of the LME's electronic system, which is expected to improve efficiency and reduce costs. The move is part of the company's efforts to modernize and improve the trading experience for its users.

Hong Kong Exchanges and Clearing Limited (HKEx), the operator of the London Metal Exchange (LME), has announced plans to introduce market structure changes aimed at boosting transparency and enhancing liquidity while protecting features that serve its physical user base. The changes are part of the company's efforts to modernize and improve the trading experience for its users.

According to a statement released on July 2, 2025, the LME will implement crossing rules on LME Select in February 2026, followed by block trade thresholds by the end of the first quarter of 2026. The exchange has modified several proposed rules based on responses to its April consultation on enhancing liquidity, including the removal of the requirement for trades exempt from block trade thresholds to be booked with a separate trade category.

The LME also plans to introduce an automated crossing solution before implementing block thresholds, reducing operational complexity for clients. "The responses that we received to our consultation have enabled us to refine our proposals," said Jamie Turner, LME Chief Operating Officer and Head of Trading. "This is the start of a considered, phased program of change that will allow the market time to prepare, and will benefit the market as a whole."

The exchange introduced trade-at-settlement (TAS) contracts for 3-month contracts on August 4, 2025, which allow participants to enter orders and trade at a differential to the yet-to-be-established Closing Price. The exchange plans to optimize tick size calibration later this year and will launch a Liquidity Provider program before implementing block trade thresholds, with details to be announced before year-end.

To support the physical market, the LME will exclude Cash and daily dates from block thresholds and expand the short-dated carry definition. These changes will be introduced alongside block trade thresholds in March 2026.

The LME's initiatives are expected to increase the use of its electronic system, improving efficiency and reducing costs. The exchange's efforts to modernize its trading platform align with its commitment to sustainability and responsible sourcing, as seen in its support for initiatives such as LMEpassport and LME net zero.

References:
[1] https://www.investing.com/news/stock-market-news/london-metal-exchange-to-roll-out-market-structure-reforms-4194794
[2] https://www.lme.com/en/