Finance
LME outlines proposed new rules on position limits
Published by Global Banking & Finance Review®
Posted on December 15, 2025
2 min readLast updated: January 20, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on December 15, 2025
2 min readLast updated: January 20, 2026
The LME will implement new position limits rules by July 2026, shifting responsibility to trading venues to enhance market dynamics.
LONDON, Dec 15 (Reuters) - The London Metal Exchange (LME) on Monday outlined plans for new rules on position limits from July next year to comply with a directive from Britain's financial regulator.
The Financial Conduct Authority currently sets and administers position limits in commodity derivatives to prevent market manipulation and abuse. But responsibility for this will pass to the trading venues themselves from July 6, 2026.
"This will strengthen the LME's ability to calibrate and manage limits directly, ensuring they remain appropriate and responsive to market dynamics," the LME, the world's primary metals marketplace, said in a statement.
The new rules will apply to "critical contracts" - in the bourse's core aluminium, copper, lead, nickel, tin and zinc futures offerings - as well as "related contracts", including options and Trade at Settlement contracts, the statement said.
Proposed changes include calculating positions on a net basis at an individual entity and group level, and replacing the current accountability levels with accountability thresholds to give the LME a "more holistic view of exposure," it added.
The exchange will issue a consultation paper on the proposed rule changes in February.
"We are keen that members and clients have plenty of time to understand the changes and encourage stakeholders to share their views on our plans," said LME Chief Operating Officer Jamie Turner.
(Reporting by Polina Devitt and Tom Daly; Editing by Bernadette Baum, Kirsten Donovan )
A position limit is a regulatory measure that restricts the maximum number of contracts a trader can hold in a specific commodity or financial instrument to prevent market manipulation.
The FCA is a regulatory body in the UK responsible for overseeing financial markets and firms to ensure consumer protection and maintain market integrity.
Commodity derivatives are financial contracts whose value is derived from the price of an underlying commodity, such as metals, oil, or agricultural products.
A consultation paper is a document issued by regulatory bodies to seek feedback from stakeholders on proposed changes to regulations or policies.
Critical contracts refer to essential agreements or financial instruments that are fundamental to the functioning of a market, such as futures and options in commodities.
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