October 16, 2019 / 11:27 AM / a month ago

London Metal Exchange to hike trading and clearing fees from January 2020

FILE PHOTO: Traders work on the floor of the London Metal Exchange, in London, Britain September 27, 2018. REUTERS/Simon Dawson

LONDON (Reuters) - The London Metal Exchange (LME) will raise its trading and clearing fees 8% from January 2020, its first increase in five years to fund new projects and keep up with inflation, the exchange said on Wednesday in a statement.

The exchange, owned by Hong Kong Exchanges and Clearing Ltd (0388.HK), also said it would increase the over-the-counter booking fee to $1.14 per lot from $1.

The 142-year-old LME has in the past come under fire from its members for lofty fees, forcing it to trim proposed fee increases in 2014.

The fee increases will allow the LME to continue to invest in “core technologies and market development initiatives” and “mirrors the compound rate of inflation (CPI) since 2015”, the LME said.

LME Chief Executive Matthew Chamberlain said since 2017, when discounts were implemented, the LME had invested in key areas of the business which along with the inflationary impact has led to “a fair and proportionate new fee schedule”.

LME Clear, the exchange’s five-year old clearing house, will raise collateral charges for gold and bonds to harmonize cash and non-cash collateral charges, the statement said.

From November 2019, charges for bonds and gold will increase from 15 basis points to 20 basis points on the value of the collateral lodged.

Other increases in fees will include market data, membership subscription fees, LMEsword and post-trade services, while some will be unchanged, the LME said.

Reporting by Zandi Shabalala, editing by Louise Heavens and David Evans

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