Sino-Singapore Jingwei, June 7th, because of nickel trading, the London Metal Exchange (LME) once again faced the risk of litigation.
On the morning of the 7th, the Hong Kong Stock Exchange announced that LME and LME Clear, the company's wholly-owned subsidiaries, were named as defendants in a judicial review claim filed by the plaintiff, with a claim amount of approximately US$15.34 million (approximately RMB 15.34 million). 102 million yuan).
Lawsuit over nickel deal
The Hong Kong Stock Exchange introduced in the announcement that the plaintiff was Jane Street Global Trading, LLC; the claim was submitted to the UK High Court on June 6, 2022 and served on LME and LME Clear.
The Hong Kong Stock Exchange said that on March 7 (UK time), nickel market prices rose significantly, as described in the LME circular issued on March 10, 2022.However, the LME believed that trading as of the evening's close was orderly.Then in the early hours of March 8 (UK time), nickel prices rose sharply in a short period of time.After discussions with LME Clear, the LME has decided to suspend trading in all nickel contracts from 08:15 UK time on the same day and cancel all transactions executed on or after 00:00 UK time on March 8.The decision to suspend trading comes as the nickel market is already out of order.
The HKEX pointed out that the LME retroactively canceled the transaction in order to return the market to the last point in time when the LME could be confident that the market was operating in an orderly manner.LME nickel trading then resumed on March 16 on all LME venues where trades are executed.
HKEx believes that the claim seeks to challenge the LME's decision to cancel the nickel contract transactions the plaintiffs claimed were executed on or after 00:00 UK time on March 8.The plaintiff claimed that the decision was unlawful under public law or constituted a violation of the plaintiff's human rights and claimed approximately US$15.34 million.LME management believes that the claim has no legal basis and will vigorously defend it.
Source: HKEx announcement
The disorder of the nickel market mentioned by the Hong Kong Stock Exchange is the "demon nickel" incident that occurred in March this year.On March 8 this year, after the LME opened, the price of nickel contracts soared from $50,000 per ton to more than $100,000.Subsequently, due to the systemic risks brought about by the surge in nickel prices, the LME suspended nickel trading and announced that the trading of the day was cancelled.
On March 15, the LME announced that the nickel contract would resume trading on March 16, but the price limit was changed to 5%.
At 8:00 a.m. local time on March 16, the LME nickel contract resumed trading after being suspended for six trading days.However, after a short period of trading, the LME immediately announced that the relevant contract trading was suspended due to system reasons.After the emergency repair, the nickel contract resumed trading after 14:00 local time, and the price of nickel futures fell all the way.
$456 million has been claimed before
This is not the first time the LME has faced litigation over nickel.On the morning of the previous trading day (June 6), the Hong Kong Stock Exchange announced that LME and LME Clear were named as defendants in a judicial review claim filed by plaintiffs Elliott Associates, LP and Elliott International, LP person, the claim amount is 456 million US dollars (about 3 billion yuan).
According to the data, Elliott Investment Management Company was established in 1977 and manages two funds, Elliott Associates, LP and Elliott International, LP, with a management scale of over US$51.5 billion by the end of 2021.
The Hong Kong Stock Exchange said in the announcement that the management of the LME believes that the claim has no legal basis and will vigorously defend it.
According to financial data, in 2021, the Hong Kong Stock Exchange will realize a profit attributable to shareholders of HK$12.535 billion (approximately RMB 10.6 billion), a year-on-year increase of 9%.Based on this calculation, the amount claimed in the two lawsuits by the LME was 3.102 billion yuan, equivalent to 30% of the Hong Kong Stock Exchange's profit last year.
In the secondary market, on June 6, the Hong Kong Stock Exchange fluctuated higher, up 1.64% as of the close, with a quotation of HK$347.60, with a total market value of HK$440.7 billion.
On the evening of the same day, the Hong Kong Stock Exchange also issued an announcement stating that the Chief Executive of the Hong Kong Special Administrative Region has given written approval in accordance with Article 69 of the Securities and Futures Ordinance to re-appoint Shi Meilun as chairman.His appointment is effective immediately until the conclusion of HKEX's annual general meeting in 2024.(Sino-Singapore Jingwei APP)
(Editor in charge: Han Yijia)
