Clifford Chance

The FCA has imposed its first ever fine on a recognised investment exchange, London Metal Exchange ("LME"), for failing to ensure its systems and controls were adequate to deal with severe market stress. This followed an unprecedented period of volatility in the nickel market in March 2022 in which, over the course of less than two days, the price of nickel on LME's electronic trading platform rose approximately 250%.

The FCA found the LME breached its obligations to have adequate systems and controls to ensure orderly trading, and its obligations and to have policies and procedures in respect of its volatility control mechanisms, and to publish those policies and procedures.

Click here to read our full analysis of the factors that contributed to the market stress and the FCA's findings.