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Fund supervisor Elliott Associates has actually taken legal action against London Metal Exchange (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 stated on Monday.
LME and LME Clear Limited have actually been called as offenders in a judicial evaluation claim submitted in a British court by Elliott Associates and Elliott International in early June, LME’s moms and dad HKEX stated in a filing.
The hedge fund looks for to challenge LME’s choice to cancel its sell nickel agreements carried out on or after 00: 00 British time on March 8, the filing states.
The LME suspended activity and cancelled nickel trades on March 8 due to volatility that saw rates double to more than $100,000 a tonne within hours.
A wave of technical problems after trading resumed on March 16 left traders fuming.
Elliot Associates declares the trade cancellation was “unlawful on public law grounds” and “constituted a violation” of its rights, according to the filing.
HKEX stated the LME dismissed the claim in its declaration. “The LME management is of the view that the claim is without merit and the LME will contest it vigorously,” HKEX stated.
HKEX shares were up 0.6% by 0400 GMT on Monday, a little underperforming while the wider market index was up more than 1%.
The LME has actually come under spotlight from European regulators following the nickel trading ordeal. It has actually led regulators and market gamers to require higher analysis on nontransparent corners of the products market.
Last month, the LME proposed steps that it stated would enhance openness and stability in the over the counter (OTC) metals market, consisting of more regular disclosures of all positions.
Its competing CME Group has actually begun talking with market individuals about the concept of a cash-settled nickel agreement for business, sources informed Reuters last month.
