The London Metal Exchange (LME) has today published its consultation outcomes confirming the introduction of certain market structure changes designed to boost transparency, increase price competition and enhance liquidity while protecting the unique features of the market that serve the LME’s physical user base.
Under the indicative timeline announced today, the LME plans to introduce crossing rules on LMEselect in February 2026, with the introduction of block trade thresholds (or “minimum volume thresholds”) planned by the end of Q1 2026.
Following a detailed review of the responses to its Consultation on Enhancing Liquidity that was issued in April, the LME has made several changes to the rules on which it consulted. Notably, the LME has removed the proposed requirement for those trades exempt from block trade thresholds to be booked with a separate trade category. This will simplify implementation for members and ISVs who will not need to make systems changes to include new trade categories.
The LME has also confirmed that an automated crossing solution will be available to members in advance of the introduction of block thresholds, which will reduce operational complexity and ensure the best possible trading experience for clients.
Jamie Turner, LME Chief Operating Officer and Head of Trading, said: “The responses that we received to our consultation have enabled us to refine our proposals and I’d like to thank members and others for their constructive approach.
“I am pleased that we have now moved to delivery mode with the first changes initially discussed in the 2024 White Paper having already been successfully implemented, as participants are now able to use trade-at-settlement contracts to help them manage their Closing Price risk. This is the start of a considered, phased programme of change that will allow the market time to prepare, and will benefit the market as a whole, in particular end users, through increased transparency, cost efficiency and – ultimately – market liquidity.”
Last month, the LME confirmed the introduction of the first market enhancements resulting from the package of measures initially put forward in its White Paper on Enhancing Liquidity. Trade-at-settlement (TAS) contracts that allow participants to enter orders and trade at a differential to the yet to be established Closing Price were successfully introduced on 4 August for 3-month contracts, providing greater flexibility and precision for trading strategies. The Exchange has already seen healthy two-way quoting activity in its TAS contracts.
This will be followed by the optimisation of the LME’s tick size calibration later this year, which is designed to encourage positive electronic execution behaviours. The LME will also be launching a Liquidity Provider programme ahead of the implementation of block trade thresholds, details of which will be announced before the year-end.
In support of the physical market, and as announced in April, in addition to excluding Cash and daily dates from the block thresholds, the LME will also expand the short-dated carry definition. This will ensure, for example, that those participants who roll positions at the front of the curve to perfectly align with corresponding physical contracts can do so as cost effectively as possible. This will be introduced in tandem with the block trade thresholds in March 2026.
In April the LME confirmed that it would not be proceeding with plans for block-like rules for over-the-counter (OTC) lookalike trades but would take a fees-based approach to levelling the playing field between on-exchange and the OTC market by increasing the Financial OTC Booking Fee (FOTCBF). The revised rates for the FOTCBF – specifically for LME lookalike trades – have been issued today and will apply from 1 October 2025.
The LME will provide further support and information for members in the period leading up to the implementation of these new measures.
