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Investing.com -- The London Metal Exchange Index on Friday announced plans to introduce market structure changes aimed at boosting transparency and enhancing liquidity while protecting features that serve its physical user base.
According to the timeline released Friday, the LME will implement crossing rules on LME select in February 2026, followed by block trade thresholds by the end of Q1 2026.
After reviewing responses to its April consultation on enhancing liquidity, the LME modified several proposed rules.
Notably, it removed the requirement for trades exempt from block trade thresholds to be booked with a separate trade category, simplifying implementation for members.
The exchange also confirmed that an automated crossing solution will be available to members before the introduction of block thresholds, reducing operational complexity for clients.
"The responses that we received to our consultation have enabled us to refine our proposals," said Jamie Turner, LME Chief Operating Officer and Head of Trading. "This is the start of a considered, phased programme of change that will allow the market time to prepare, and will benefit the market as a whole."
Last month, the LME introduced trade-at-settlement (TAS) contracts for 3-month contracts, which allow participants to enter orders and trade at a differential to the yet-to-be established Closing Price.
These contracts were successfully launched on August 4, with the exchange reporting healthy two-way quoting activity.
The exchange plans to optimize tick size calibration later this year and will launch a Liquidity Provider program before implementing block trade thresholds, with details to be announced before year-end.
To support the physical market, the LME will exclude Cash and daily dates from block thresholds and expand the short-dated carry definition.
This will ensure participants who roll positions at the front of the curve to align with physical contracts can do so cost-effectively. These changes will be introduced alongside block trade thresholds in March 2026.
The LME previously decided against implementing block-like rules for over-the-counter (OTC) lookalike trades, opting instead for a fees-based approach by increasing the Financial OTC Booking Fee. The revised rates for this fee were issued Friday and will apply from October 1, 2025.