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LONDON (Reuters) -Britain’s Financial Conduct Authority (FCA) and the Bank of England are talking to the London Metal Exchange about the resumption of a fair and orderly market in nickel, the FCA said on Monday in response to a request for comment.
The LME was forced to halt nickel trading and cancel trades after prices doubled on Tuesday, March 8 to more than $100,000 per tonne in a surge sources blamed on short covering by one of the world’s top producers.
“As a regulated investment exchange, the LME is responsible for the maintenance of fair and orderly markets,” the FCA said.
“This may include taking steps such as a temporary suspension of trading at times of extreme price volatility.”
The LME also deferred physical delivery of maturing contracts and announced it would temporarily stop publishing official and closing nickel prices.
The FCA regulates the trading activities of the London Metal Exchange (LME) as a UK Recognised Investment Exchange and the Bank of England regulates the clearing activities of LME Clear as a Recognised UK Central Counterparty.
Reporting by Pratima Desai; Editing by Hugh Lawson and Emelia Sithole-Matarise
