James Moore: Fines for standing? Let’s applaud the LME


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The Independent Online

Outlook The City is now in the midst of the summer silly season as regards news. So here’s an apparently silly story.

The London Metal Exchange is getting hot under the collar about the behaviour of traders around its old-fashioned “Ring”, where they still shout orders at each other in one of the last examples of “open-outcry” trading.

Nine of them have been hit with penalties for the heinous crime of, wait for it, standing up. In the arcane world of industrial non-ferrous metal trading, standing up apparently gives you an unfair advantage.

Penalties for the naughty nine range from the accumulation of disciplinary points to four-figure fines. The real bad boy of the bunch is even getting a two-day suspension. Ouch!

We are in an era in which the City has been revealed as a cesspool, where venal traders routinely promise bottles of Bolly to their mates for cooking the books. Virtually every pricing benchmark is open to suspicion as the Square Mile and Canary Wharf are enveloped in a fog of corruption.

And yet here’s the LME worried about a few over-excited men getting to their feet when trading gets frenetic.

But perhaps we shouldn’t scoff. At least the LME appears to recognise fairness as a concept. That’s unusual among exchanges, where fairness hasn’t been much in evidence. Take high-frequency traders. To get an edge they spent millions digging up streets to lay super-fast cables. And yet they were welcomed with open arms by exchanges, regardless of whether other market participants might have been disadvantaged.

So perhaps, at least on this occasion, the LME and its standards are more worthy of celebration than ridicule.