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HKEX’s London Metal Exchange names Oliver Wyman to review nickel trading chaos amid investor lawsuits

  • Independent review will run until December and examine issues that forced the bourse to suspend nickel trading in March
  • Suspension only the second time in the 145-year-old metal exchange’s history that it had cancelled trades in one of its futures contracts

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Traders on the trading floor of the open outcry pit at the London Metal Exchange in February. Photo: Bloomberg
Chad Brayin London
The London Metal Exchange (LME) has appointed consultants Oliver Wyman to conduct an independent review into the issues that triggered a chaotic period in the nickel market earlier this year and prompted lawsuits from investors.
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The Hong Kong Exchanges and Clearing (HKEX)-owned bourse halted trading in nickel and cancelled thousands of trades in the early hours of March 8 as soaring prices threatened to destabilise the market. It was only the second time in the 145-year-old bourse’s history that it had cancelled trades in one of its metals.

“We look forward to considering recommendations put forward as part of the review findings, and to taking further steps to support the long-term health, efficiency and resilience of the market and its constituents,” the LME said in a statement.

The review is expected to run until December and include “extensive market engagement and data collection,” it added.

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HKEX CEO Nicolas Aguzin on the future of Hong Kong’s capital market

HKEX CEO Nicolas Aguzin on the future of Hong Kong’s capital market
It comes as Britain’s financial regulators are conducting their own review of LME’s handling of the unprecedented suspension in nickel trading, which was halted for more than a week and had a chaotic restart. US hedge fund Elliott Management and quantitative investing firm Jane Street Global Trading have sued the exchange in London, seeking up to £471 million in damages.
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Nickel prices, alongside other commodities, rose dramatically in early March after Russia’s invasion of Ukraine stoked concerns about supply shortages. Prices surged as much as 250 per cent in just over 24 hours, squeezing dozens of short sellers including the world’s largest stainless steel producer Tsingshan Holding Group of China.
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