ASIC has released its annual market assessment of the London Metal Exchange Limited (LME).
The report covers the period 11 April 2008 to 15 April 2009.
ASIC has concluded that LME has adequate arrangements for the supervision of its markets in accordance with the obligations under s792A(c) of the Corporations Act.
ASIC does not have any recommendations to make to LME arising from this assessment.
Background
LME has been granted an Australian market licence as an overseas market operator.
A financial market is defined as a facility through which offers to buy and sell financial products are regularly made. Anyone who operates a financial market in Australia must obtain a licence to do so, or otherwise be exempted by the Minister.
LME is currently licensed to operate a market trading non-ferrous metals futures and options.
As part of the conditions of granting a licence to operate a financial market, the licensee must supervise the market in accordance with Part 7.2 of the Corporations Act.
Under the Corporations Act, ASIC is required to conduct an assessment of the extent to which licensed financial markets are complying with their obligations to supervise their markets. ASIC must do this at least once per year in relation to each licensee. ASIC can also assess how well a licensee is complying with its other obligations under the Corporations Act.
In conducting our assessment of this overseas market operation ASIC sought and received information provided from the relevant home regulatory authority about the supervisory arrangements of the market operator to help us in compiling this report.