LME to Launch CAPS Service on March 31

Mumbai, Mar 27--The London Metal Exchange (LME) has announced that it will launch a Cleared Average Price Swap (CAPS) service on March 31. The new CAPS contracts are a monthly average price swap, settled in cash against the Exchange's underlying non-ferrous metals contracts. A CAPS contract is not tradeable on the Exchange, but is agreed bilaterally "off-Exchange" and brought on to the Exchange for matching and clearing in accordance with the LME Rules and the Rules & Regulations of LCH.Clearnet Ltd. Commenting on the launch, Emma Davey, LME Membership and Business Development Manager said: "The launch of the CAPS service is a new development in the LME's ongoing expansion of service offerings to its members. It is the first step in the Exchange's plans to provide greater efficiency to the post-trade environment in our core metals products." CAPS contracts are available for the Exchange's eight non-ferrous metals namely Primary Aluminium, NASAAC, Aluminium Alloy, Special High Grade Zinc, Tin, Nickel, Copper Grade A and Standard Lead. "Cleared average price swaps will allow category 1 and 2 members to put their member-to-member transactions through to clearing at LCH Clearnet with the resulting advantages of a central counterpart," an official said.