On 1 March 2006, Spectron Group Plc issued a notice to its customers.
In that notice Spectron informed its customers that Spectron had asked the OFT to withdraw the interim measures directions the OFT imposed on the LME on Monday 27 February.
In its notice Spectron makes a number of accusations against the LME which Spectron states as fact.
The claims Spectron makes against the LME are entirely without foundation.
Within 24 hours of the OFT imposing the interim measures direction, the sole complainant (Spectron) has asked the OFT to withdraw it.
The LME has taken immediate steps to obtain clarification from the OFT and is currently waiting on the OFT for that clarification.
By issuing this notice for the withdrawal of the interim measures direction, Spectron concedes that there is no public interest in interim measures being maintained and that Spectron is suffering no damage that requires protection by interim measures.
This is consistent with the representations that were made by the LME to the OFT prior to the OFT issuing the interim measures direction. The LME therefore welcomes Spectron's decision to request the OFT to withdraw the interim measures direction.
The LME is an important constituent of the international physical metals industry and is committed to serving its interests. The LME will vigorously defend its ability to provide the services that are required by its members and their clients.
Background
The LME is a not for profit, member owned institution. Its contracts can only be traded by member firms and it equally supports and provides three trading platforms to members, which are owned by, and only available to, members. As a regulated exchange the LME is committed to high-levels of transparency and high, exchange-levels of regulation.
As a voice-broker, Spectron is not under the same FSA regulatory regime as the LME.
In LME notice 05/228, dated 3 August 2005, notice 05/275, dated 16 September 2005, and notice 05/352, dated 23 November 2005 the Exchange announced its plan to extend the trading hours for LME Select to cover early morning trading with effect from 1 March 2006. The plan to extend the trading hours was in response to requests from LME members.
The OFT first received a complaint from Spectron Group plc on 1 July 2003 that the operation of LME Select by the Exchange was anti-competitive. The OFT has been conducting an investigation into the operation of LME Select since then.
Spectron and the OFT have been aware of the LME's plans to extend the trading hours for LME Select since the beginning of August 2005.
On 2 February 2006, Spectron asked the OFT to take urgent action to stop the Exchange from extending LME Select trading hours. In making its request Spectron claimed that unless the OFT took urgent action to stop the LME, the extended trading hours for LME Select would seriously and irreparably harm Spectron's business.
On 13 February 2006 OFT advised the LME of the Spectron complaint and that they were considering an interim measures direction. On 27 February 2006 the OFT imposed an interim measures direction.
The OFT decided that the Exchange should be prevented from extending the trading hours for LME Select in order (1) to protect the public interest ( the OFT's case is that the LME Select extended trading hours would be against the public interest and that interim measures are therefore required to prevent damage to the global market for the provision of platforms for exchange-based trading of non-ferrous base metals contracts) and (2) to protect Spectron from irreparable damage.
The Exchange continues to strenuously defend its position and actively to seek clarity, for the benefit of its members, from the OFT.
LME Select opening hours will continue to be 7.00am to 7.00pm (London time) until further notice.
