HOTTER ON METALS: Fee differentiator plan aims to drive liquidity

A differentiated fee structure designed to drive member-to-member trade away from the telephone market is being proposed by the London Metal Exchange as part of its discussion paper.

The goal is to incentivize trade on the exchange's electronic trading platform, LMESelect, and is proposed to be achieved by cutting fees to trade electronically while raising fees for the telephone market by around 50%.
The reason for this, LME chief executive officer Matthew Chamberlain told Fastmarkets, is to boost transparency and focus liquidity in a central venue so participants can access the exact same data on available prices at the same time.
"We believe flexibility and user choice is at the heart of what we do, so we do want to give people the ability to keep using the inter-office, or telephone, market," he said in an interview.

"But we do believe that, in common with other peer venues, it is right we ask people to pay more if they're not taking part...

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