(FN) The London Metal Exchange is consulting its members on how to spend $10m in fines it has gathered from rule breakers, including from traders that have been caught swearing and chewing gum. Most of the money comes from penalties imposed by the LME on members for failures related to the warehousing and delivery of metals but the City trading institution also operates strict guidelines that include bans on swearing and chewing gum in the Ring, one of the last open outcry trading floors in operation. The LME is talking to its members on what it should do with the $10m and is considering four options: donating to charity; financing an incentive programme to encourage new traders; upgrading its infrastructure; and covering expenses linked to regulatory investigations. Matthew Chamberlain, the LME’s chief executive, said: “Based on some conversations we’ve had, I think a reasonably significant proportion will go to charity. I think that’s right. But I think we’d also like to use some of it for the market and obviously it’s for the benefit of members.” The LME’s deliberations on the enforcement proceeds have emerged as part of a broader update on a consultation with its members that was launched in August. The exchange is planning to keep its trading and clearing fees flat next year but will introduce a new charge for access to its community data centre. The LME’s decision to do something positive with the enforcement proceeds comes just over a year since Chamberlain became chief executive of the exchange. The former investment banker was immediately faced with getting the exchange back on track, launching his strategy and restoring volume growth. Enforcement proceeds come from fines on members for issues such as reporting breaches, warehouse fines, and dealing offences in the Ring that are more serious than chewing gum or using bad language. One of the most recent fines for a minor offence came in August this year when a Societe Generale trader was fined £500 because he “was heard using foul and abusive language” while dealing in the Ring. Financial News reported earlier in November that the LME is separately planning to bring in a new code of conduct in a bid to stamp out inappropriate behaviour after one of its member groups held a networking party at the Playboy Club in London. The party coincided with LME’s annual week-long gathering in October for around 2,000 commodities traders but drew heavy criticism in the wake of the global #MeToo movement.

According to a person familiar with the LME’s thinking, the exchange will either introduce a voluntary code of conduct to prevent its members from holding events that do not fit with the ethos of the LME or make it obligatory for members to ascribe to the code if they wish to use the LME Week branding to promote an event.