LME fee change to cut forecast revenue by 5 pct

The London Metal Exchange's (LME) changes to a controversial new trading fee will cut total forecast revenues by 5 percent, it said on Friday.

 

 

The 135-year-old institution, where metals including copper, aluminium, nickel and zinc are traded by open outcry as well as electronically, said on Thursday it would delay introduction of the new fee from the previously announced March 1 until July 2. It will also scrap it for certain heavily-traded spreads.

 

 

A rare public spat between users of the exchange and the LME over the fee it announced in December forced it to go back to the board and review objections on Thursday. The board also looked at non-binding bids from around half of the roughly 15 companies that had expressed interest.

 

 

Bidders include CME Group, Hong Kong Exchanges and Clearing Ltd (HKEx), NYSE Euronext and the InterContinental Exchange (ICE), sources and media reports have said.

 

 

Some potential buyers have been watching how the LME deals with the dispute over the fee, as revisions are expected to dent projected extra revenue included in the valuation given to bidders.

 

 

However, the LME said: "The changes to the LME exchange user fee will cut total forecast revenues by 5 percent."

 

 

The exchange reported revenue of 50.7 million pounds ($79.61 million) for 2010, according to figures on its website.