Fund supervisor Elliott Associates has sued London Metallic Change (LME) for $456 million following the suspension and cancellation of nickel trades on the platform owned by Hong Kong Exchanges and Clearing Ltd , the Hong Kong bourse mentioned on Monday.
LME and LME Clear Restricted have been named as defendants in a judicial assessment declare filed in a British courtroom by Elliott Associates and Elliott Worldwide in early June, LME’s mother or father HKEX mentioned in a submitting.
The hedge fund seeks to problem LME’s determination to cancel its trades in nickel contracts executed on or after 00:00 British time on March 8, the submitting says.
The LME suspended exercise and cancelled nickel trades on March 8 on account of volatility that noticed costs double to greater than $100,000 a tonne inside hours. A spate of technical glitches after buying and selling resumed left merchants fuming.
Elliot Associates claims the commerce cancellation was “illegal on public legislation grounds” and “constituted a violation” of its rights, in accordance with the submitting.
HKEX mentioned the LME dismissed the declare in its assertion. “The LME administration is of the view that the declare is with out benefit and the LME will contest it vigorously,” HKEX mentioned.
The LME has come underneath highlight from European regulators following the nickel buying and selling debacle. It has led regulators and trade gamers to name for higher scrutiny on opaque corners of the commodities market.
Final month, the LME proposed measures that it mentioned would enhance transparency and stability within the over-the-counter (OTC) metals market, together with extra frequent disclosures of all positions.
(Reporting by Selena Li; Enhancing by Florence Tan, Kim Coghill and Kenneth Maxwell)
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