LONDON, Sept 3 (Reuters) - The new clearing house of the London Metal Exchange will launch on Sept. 22 after it received approval from U.K. and European regulators, the exchange said on Wednesday.
The LME, the world’s oldest and largest market for industrial metals such as copper and aluminium, decided to build its own clearing house three years ago to increase income, boost development of new products and improve risk monitoring.
The Bank of England has approved LME Clear’s application as a central counterparty under the European Markets Infrastructure Regulation (EMIR), an LME statement said.
This followed a positive opinion by regulators and central banks in France and Germany, it added.
“It’s the last significant milestone on the path to our launch,” said LME Clear Chief Executive Trevor Spanner.
LME Clear will initially clear all trades on the LME and those matched on the OTC matching service.
In June, Spanner told Reuters the clearing house was looking into expanding types of allowed collateral to include warehouse warrants as well as Chinese renminbi as an acceptable cash collateral.
The exchange is owned by Hong Kong Exchanges and Clearing Ltd. (Reporting by Eric Onstad; Editing by Michael Urquhart)