UK fines LME nearly $12 million over handling of 2022 nickel crisis

(Reuters) - Britain's financial regulator on Thursday fined the London Metal Exchange 9.2 million pounds ($11.9 million) over its handling of the 2022 nickel crisis, and said the exchange had failed to ensure its systems were well-equipped.

In March 2022, the LME was forced to halt nickel trading and cancel trades after prices doubled to more than $100,000 per tonne in a surge blamed on short-covering. But the move had cost the exchange severely.

Britain's Financial Conduct Authority said the LME had failed "to ensure its systems and controls were adequate to deal with severe market stress", and highlighted how its automatic volatility controls operated and crises were escalated and managed internally.

"We take our responsibilities as a global market operator very seriously, and acknowledge that we could have provided a better line of defence...," LME Chief Executive Officer Matthew Chamberlain said in a statement.

The LME, operated by the Hong Kong Exchanges and Clearing Ltd, has qualified for a 30% reduction in the fine since it accepted the findings, the regulator said.

($1 = 0.7721 pounds)

(Reporting by Pushkala Aripaka in Bengaluru; Editing by Shilpi Majumdar)