OFT rules to restrict LME trading day

OFT rules to restrict LME trading day

The London Metal Exchange has been prevented from extending the trading hours of its electronic dealing platform, LME Select, by the UK's Office of Fair Trading (OFT).

In a statement, the regulator says it is investigating "a suspected abuse of a dominant position" by the exchange and says it believes a plan to extend the trading hours on the LME platform to cover the Asian trading day "would further restrict competition".

The OFT has issued an 'interim measures direction' against the LME to prevent the exchange extending the hours of its e-trading platform following a complaint by Spectron Group, a broker in the energy trading markets.

Spectron Group argues that if LME extends the operating hours of the Select system, this would force its own eMetal electronic trading platform out of the market.

The LME Select platform currently opens from 7am to 7pm London time and the exchange had intended to extend trading hours to 1am to 7pm from 1 March. The LME now will not be able to implement the change until the OFT completes its investigation or the direction is withdrawn.

The OFT says this is the first time it has employed these powers.

John Fingleton, OFT chief executive, comments: "We believe it is necessary to make this interim direction to protect the public interest in maintaining as competitive a market as possible.

"In addition, unless the OFT grants the interim measures direction, it is likely that serious and irreparable damage to Spectron, and especially its reputation, will arise that cannot likely be subsequently remedied."

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