LME case could redefine exchange powers to cancel trades

European trading venues have broad discretion when responding to market emergencies

A ruling against the London Metal Exchange, in a case by two financial firms that had their nickel trades cancelled last March, could have wide-ranging implications for how trading venues deal with extreme market events.

“Everybody is watching how the LME case turns out. It is a concern,” says a regulatory expert at an electronic market-making firm.

Following a three-day trial in June, a UK administrative court will decide whether the LME was justified in cancelling $12 billion worth of nickel

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