British financial regulators said on Monday that they would review the way the London Metal Exchange (LME) handled a halt in chaotic nickel trading last month and said the episode underlined questions about the LME’s transparency.
LME is the world’s oldest and largest market for industrial metals, had suspended nickel trading on March 8 after prices spiked by more than 50% in a matter of hours to hit $100,000 a tonne.
The Financial Conduct Authority said it and the Bank of England would determine if further action should be taken.
“Events around the suspension and resumption of trading have underlined questions raised in a recent LME Discussion Paper on Market Structure, particularly the role of transparency in the LME and related markets,” the regulators said.
“The FCA has been in discussion with the LME on its proposals for some time and expects the LME to consider carefully how recent events should shape its future approach on market structure.”