The London Metal Exchange has announced the successful launch of LMEshield, the new electronic warehouse receipt system for the global commodities market. The first receipt was issued by Henry Bath & Son on behalf of BNP Paribas Arbitrage.
LMEshield is a custody tool that issues and manages electronic receipts relating to commodities stored off-warrant in a range of global locations. At go-live, LMEshield is available in 19 jurisdictions, including countries new to the LME storage network such as India, South Africa and Chile.
"We recognise that there is a need for a reliable standard for warehousing worldwide," says Matthew Chamberlain, Head of Business Development at the LME. "We are pleased to be able to extend the LME's experience in secure warranting beyond the LME network to improve confidence in global warehousing, provide protection against fraud and expand the market for commodities financing."
The LME is grateful for the support of the warehouses, metal traders and financing banks that participated in consultation on the design and deployment of the LMEshield system, including:
- BNP Paribas Arbitrage SNC
- CWT Commodities (Metals) Pte Ltd
- Goldman Sachs International
- Henry Bath & Son Ltd
- Independent Commodities Logistics BV
- Louis Dreyfus Company Metals Suisse SA
- Metro International Trade Services LLC
- Pacorini Global Services (Spain) SAU
- Société Générale SA
- Standard Chartered Bank
- Vollers Group GmbH
LMEshield has been developed in partnership with software provider Kynetix. Hosted on a new platform and featuring a print-in-depository receipting model, it is based on the same operating principles as the LME's existing warrant-transfer system, LMEsword, which monitors stocks related to deliveries made on the LME market. The new system is available to LME members and non-members alike.
The LME has plans to expand the LMEshield network, and further eligible jurisdictions and commodities will be added in due course.