London 16/05/2016 - The London Metal Exchange (LME) will introduce an electronic trader programme for all of its members' clients from June 1, with a reduced fee structure as an incentive, it said.
"[This] will apply to trades executed on LMEselect in aluminium, copper, zinc, nickel, lead and tin, in respect of outright third Wednesday contracts and three months to and from third Wednesday spreads," the exchange said in a notice on Monday.
Clients will be entitled to a discount of two-thirds on total execution and clearing fees as a reward for their willingness to participate in the LME's goal of further building liquidity on the monthly dates, it added.
Electronic client trading volumes on LMEselect have risen more than 14 percent in 2016 so far, which is because already-running liquidity provider and new market participant programmes have encouraged increased liquidity on LMEselect, the exchange said.
Many participants would like to see greater electronic liquidity on monthly third Wednesday dates - there are already tighter bid-offer spreads for these.
"Recognising that the monthly dates are not currently as liquid as the core three-month price and responding to member and client requests, the LME believes that clients may be more willing to execute directly on monthly dates in LMEselect if clients were entitled to a discount for such execution," the exchange said.
(Editing by Mark Shaw)