Competition watchdog ends LME probe

Competition watchdog ends LME probe

The London Metal Exchange (LME) says the UK's Office of Fair Trading (OFT) has finally and unconditionally closed a four year competition investigation into its operations that was triggered by a complaint from The Spectron Group.

The OFT launched the investigation after receiving a complaint from Spectron - a voice broker in the energy trading market - on 1 July 2003 over the LME's plans to extend the trading hours of the LME Select electronic dealing platform to cover the Asian trading day.

Spectron argued that the move would force its own eMetal electronic trading platform out of the market. But Spectron later said it had withdrawn its request because the OFT's measures attracted negative publicity in the market and restricted liquidity.

Despite this, in February 2006 the OFT imposed a temporary ban on the LME that prohibited the exchange from extending trading hours on the Select platform. The ban - which was the OFT's first use of an interim measures direction (IMD) - was eventually lifted in May 2006.

The OFT later faced heavy criticism from the Competition Appeals Tribunal (CAT) which damned the investigative process as "superficial and flawed and the IMD consequently ill-founded".

The LME says the competition probe is now "finally and unconditionally" closed. Martin Abbott, chief executive, LME, says: "The long-drawn out nature of this matter has created material uncertainty in the market but today's decision brings this to an end."

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