The LSE Directory / Clearing houses
LME Clear Ltd is the central counterparty (CCP) clearing house for the London Metal Exchange. Launched on 22 September 2014, it took over LME clearing from LCH.Clearnet, which had cleared LME contracts for the prior 25 years, migrating all open member positions onto its own risk and clearing system, LMEmercury, built with technology vendor Cinnober. It clears exchange-traded and OTC-matched futures and options across the LME's core base metals (aluminium, copper, zinc, nickel, lead and tin) and aluminium alloys, plus contracts added over time: ferrous futures referencing Platts and Argus steel scrap, rebar and HRC prices, and EV-related metals including cobalt, lithium hydroxide and molybdenum. As CCP it stands as buyer to every seller and seller to every buyer on each cleared contract, guaranteeing performance through a margin and default-fund waterfall. It is the only clearing house in the world dedicated exclusively to industrial metals derivatives, a narrower mandate than diversified multi-asset clearers such as LCH or ICE Clear Europe. LME Clear is a wholly owned subsidiary of the London Metal Exchange Group, itself wholly owned by Hong Kong Exchanges and Clearing (HKEX) since HKEX's £1.39 billion acquisition of LME Holdings completed on 6 December 2012, so it operates as part of a vertically integrated exchange-and-clearing group rather than an independent utility. Its clearing membership is drawn from banks, brokers and physical metals trading firms active on the LME's open-outcry Ring, its LMEselect electronic platform and the inter-office telephone market. It is authorised and regulated in the UK by the Bank of England as a recognised UK CCP, approved under the Financial Markets and Insolvency Regulations in August 2014, and holds qualifying central counterparty (QCCP) status under EMIR, authorised on 3 September 2014. The LME's board decided to move to self-clearing in December 2011, and the exchange and LCH.Clearnet agreed in June 2013 to end their 25-year relationship, with LME Clear launching in September 2014. Its resilience was tested severely during the March 2022 nickel crisis: LME nickel prices nearly quadrupled over three trading days, LME Clear's intraday margin calls on the three-month nickel contract topped $7.4 billion in a single day, and the exchange ultimately cancelled roughly $12 billion of nickel trades to avert clearing-member defaults. A separate March 2025 FCA final notice fined the London Metal Exchange itself, the trading venue and a legally distinct entity from LME Clear, £9.2 million over market-disorder failings during the same episode, the FCA's first enforcement action against a UK Recognised Investment Exchange. Michael Carty has been LME Clear's CEO since October 2023. In direct response to the nickel episode, LME Clear proposed reforms in November 2024 to triple clearing members' minimum net capital requirement, from $10 million to $30 million, and to cap the mutualised portion of its default fund under a more defaulter-pays model; clearing members welcomed the default-fund cap by early 2025. On the governance side, Julie Carruthers became interim Chair of the LME Clear board effective 1 January 2026, succeeding David Warren.
