London Metal Exchange to push for reform after US judge dismisses suits

The end of class action lawsuits in the United States against the London Metal Exchange will open the way for a long-promised reform of the aluminium warehousing issue and allow the bourse to focus on its expansion in Asia, according to brokers.

An LME spokeswoman told the South China Morning Post the London-based commodities exchange was pleased to have been granted immunity from the aluminium class action lawsuits and would continue to carry out its warehouse reform plans.

"The court has recognised the important regulatory function which the LME performs and that the LME has a duty to the entire metals community to run a fair and orderly market," she said. "We continue to take action to manage queue-related issues in accordance with our obligations and we remain committed to do everything in our power to remedy these issues."

In a decision made public last week, a district judge in New York dismissed LME as a defendant from class action brought by metal users.

The court concluded the LME was an "organ" of the British government and therefore immune from the lawsuit under the Foreign Sovereign Immunities Act.

The LME in August last year was accused to have conspired with some banks and warehouse owners since May 2009 to drive up the prices of aluminium by hoarding supply, causing delays, known as queues, of up to 16 months to fill orders.

Established in 1877, the LME was bought in December 2012 by Hong Kong Exchanges and Clearing, making the latter a party to the lawsuits.