DISCLAIMER: This website is for informational purposes only and it should not be regarded as an offer or the solicitation of an offer to buy or sell the instruments mentioned in it. The financial instruments described herein may not be eligible for sale in all jurisdictions or to certain categories of counterparties. The risk of trading futures and options and other derivatives involves a substantial risk of loss and is not suitable for all persons. Each person must consider whether a particular trade, combination of trades or strategy is suitable for that person's financial means and objectives. Any content included herein may include discussions of seasonal patterns, however seasonal patterns are no indication of future market trends and past performance is not indicative of future results. LCMC does not make markets in any of the commodities mentioned in this report; likewise, neither LCMC, nor its officers, partners and employees have ownership in any of the commodities mentioned herein. No part of this website may be reproduced without full attribution and the approval of LCMC.
MIFIDPRU Disclosures — 2025 for FY 2024
LCM Commodities, UK LLP (LCMC UK) is a Limited Liability Partnership (OC330545) whose principal activity is that of a commodities derivatives broker and service provider to group companies. LCMC UK is independent and provides a service to Professional Clients and Eligible Counterparties.
LCMC UK was founded as a private partnership founded in 2007 and is based in London. LCMC UK is owned by Edge Commodities Limited.
LCMC UK was authorised and regulated by the Financial Conduct Authority (No. 587454) in June 2013, and currently holds the following permissions:
As an authorised firm, LCMC UK is required to disclose information relating to the capital it holds and each material category of risk or harm it faces. These disclosures are made in accordance with the rules of the Investment Firm Prudential Regime (IFPR), which came into force on the 1 January 2022.
LCMC UK is classified as a Non-Small and Non-Interconnected (Non-SNI) firm under IFPR and believes that the disclosures in this document satisfy the requirements of MIFIDPRU 8.
LCMC UK has assessed its on- and off-balance sheet items in line with MIFIDPRU 7.1.4R and confirms it falls below all applicable thresholds. As such, it is not required to establish Risk, Remuneration, or Nomination Committees under MIFIDPRU 7.3.
The Board retains direct oversight of key areas, including risk management, capital and liquidity planning, remuneration policies, and senior management appointments. The Board sets LCMC UK’s risk appetite and tolerance for risk, and ensures that the firm has implemented an effective, ongoing process to identify risks, assess potential impacts, and ensure that such risks are appropriately managed. Risk management is overseen by the CFO/COO, Man Yuk Wong, who is independent of revenue-generating activities and reports directly to the Board.
The Board comprises three current members (Simon Butler, Hicham Guennouni, and Bradley Flaster). The firm does not have a formal diversity policy but is committed to considering diversity, including gender and background, in future appointments where appropriate.
LCMC UK updates this disclosure annually or upon material change. These disclosures are based on the company's position as at 31 December 2024. These disclosures have been reviewed by the Directors and are not subject to an audit except to the extent where they are equivalent to disclosures made under accounting requirements.
As a non-SNI firm, LCMC UK is required to maintain ‘own funds’ at all times at least equal to its ‘own funds requirement’, which is the higher of:
Fixed Overhead Requirement (FOR)
As at 31 December 2024, LCMC UK’s FOR is £2,716, calculated as one quarter of the firm’s relevant annual expenditure of £10,864 for the year ending 31 December 2023.
K-Factor Requirement
| K-Factor | Capital requirement |
|---|---|
| K-DTF | £28,101 |
| K-COH | £28,284 |
| K-NPR | - |
| K-CON | - |
| Total | £56,385 |
Since the PMR of £330,000 is higher than both the FOR (£2,716) and the total K-Factor Requirement (£56,385), it is the binding own funds requirement for LCMC UK as at 31 December 2024.
Composition of Own Funds (Audited)
As at 31 December 2024, LCMC UK holds own funds amounting to £500,103, comprised entirely of Common Equity Tier 1 (CET1) capital, as detailed below:
| Component | £ |
|---|---|
| Members’ capital | £500,103 |
| Total CET1 Capital | £500,103 |
Liquidity Requirements
LCMC UK is also required to hold core liquid assets equal to at least the sum of:
As LCMC UK does not provide client guarantees; therefore, the second element of this requirement does not apply.
As at 31 December 2024 (audited), LCMC UK held regulatory capital resources of £500,103, comprised entirely of Common Equity Tier 1 capital.
Following its Internal Capital and Risk Assessment (ICARA), which incorporates harm, wind-down stress, and scenario analyses, LCMC UK has determined that no additional capital beyond the Pillar 1 requirements is necessary.
LCMC UK considers this level of own funds sufficient to support ongoing operations and ensure an orderly wind-down if required.
The firm's governing body regularly reviews its capital adequacy position to ensure continued compliance with MIFIDPRU requirements.
The Board determines the LCMC UK’s business strategy and risk appetite, and is responsible for designing and overseeing a risk management framework that identifies, monitors, and manages the risks faced by the firm. The Board also determines how these risks are mitigated, and continuously assesses the effectiveness of the firm’s risk management arrangements.
The Board meets regularly to review profitability, regulatory capital management, business planning and risk management matters. Risks are managed through a framework of policies and procedures designed to ensure compliance with applicable laws, standards, principles, and rules, including those of the Financial Conduct Authority. These policies and procedures are reviewed and updated as necessary.
Given its size and business model, LCMC UK has an operational infrastructure appropriate to its risk profile. Through the Internal Capital and Risk Assessment (ICARA), the Board has identified LCMC UK’s most significant risk types as follows:
Credit risk is the risk of potential loss arising from a customer or counterparty default. LCMC UK maintains its operational and surplus funds with Lloyds Bank, an investment grade institution with a low probability of default. The firm may hold short-term receivables from R.J. O’Brien Limited, an LME Category 2 member with regulated status and a strong operational track record. LCMC UK may also have intercompany receivables due periodically from its U.S.-based parent, LCM Commodities LLC.
Operational risk arises from inadequate or failed internal processes, people, systems, or external events. For LCMC UK, this includes risks such as errors in trading processes, system failures affecting access to trading platforms, or business disruption leading to revenue loss or reputational damage. The firm manages operational risk through a comprehensive framework of policies, procedures, and controls designed to maintain a sound and well-controlled operational environment.
Market risk is the risk of loss due to adverse movements in market variables such as foreign exchange rates and interest rates. LCMC UK is primarily exposed to foreign exchange risk, as revenue is largely USD-denominated while the functional currency is GBP. The firm holds no borrowings and therefore has no interest rate risk. Market risk may also arise from rare counterparty failures in matched principal transactions or trade mismatches. Such exposures are monitored regularly.
Liquidity risk is the risk that the firm will be unable to meet its financial obligations as they fall due without incurring significant losses or relying on uncertain funding sources. LCMC UK does not hold client money, does not borrow, and operates solely as a broker (matched principal or agency), so liquidity risk is generally low and mainly driven by operational cash flow needs. The firm ensures sufficient funds are maintained to meet liabilities as they fall due. Liquidity is monitored regularly to optimise resource utilisation and identify longer-term funding needs.
Compliance risk arises from potential breaches of regulatory requirements, which could jeopardise LCMC UK’s FCA authorisation and its ability to conduct core business activities. The regulatory environment is increasingly complex, with evolving expectations under the FCA framework. Failure to comply with regulatory obligations could result in sanctions, reputational damage, or operational restrictions.
Business risk refers to risks related to fluctuations in economic conditions that may impact LCMC UK’s ability to execute its business plan, generate revenue, or raise capital under stress. LCMC UK does not take proprietary positions and acts solely as a broker, focused on securing the best available prices for clients. The market is highly competitive and dominated by a few large institutions. Key business-specific risks include:
LCMC UK has adopted a remuneration policy and procedures that comply with the requirements of MiFIDPRU and SYSC 19G, which considers qualitative, quantitative and all the proportionality elements in line with the FCA Guidance.
The remuneration policy is designed to align staff interests with those of clients and to prevent excessive risk-taking. It promotes sound and effective risk management by ensuring no individual within the firm takes risks beyond the Board-approved risk appetite.
The remuneration policy:
Through the implementation of a robust governance and risk management framework around remuneration, LCMC UK aims to:
In accordance with SYSC 19G.1.1R of the FCA Handbook, LCMC UK confirms that the average value of its on-balance sheet assets over the preceding four-year period has remained significantly below £100 million. As such, LCMC UK is exempt from the following provisions of the MIFIDPRU Remuneration Code:
This Remuneration Policy has been designed to be appropriate and proportionate to the nature, scale, and complexity of the risks inherent in the firm’s business model and activities. The policy is subject to review at least annually, and more frequently if there are material changes to the firm’s structure, business activities, or regulatory obligations.
LCMC UK’s remuneration policy applies to all staff members and covers various components of remuneration, including:
This policy ensures that all employees, regardless of their position or role within the firm, are subject to consistent and fair remuneration practices which encompass both fixed components (such as base salary) and variable components (such as commission and various benefits related to pensions, buy-outs, and terminations).
Variable remuneration is assessed using the following financial and non-financial criteria:
| Financial Performance Criteria | Non-Financial Performance Criteria | |
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Per FCA definitions, MRTs include senior management, risk takers, control function staff, and others whose activities materially impact the firm’s risk profile. LCMC UK has identified the following MRTs:
| Name | Function |
|---|---|
| Simon Butler | CEO, Head of Base |
| Hicham Guennouni | Head of IT |
| Martin Reinke | Head of Precious Forwards |
| Michel Simonian | Head of Precious Options |
| Mark McGuire | Head of European Emissions |
| Rebecca Wong | MLRO |
Additional requirements for MRTs include:
LCMC UK is not required under MIFIDPRU 7.3.1R to establish a risk committee. The Board retains direct responsibility for the remuneration policy, which is reviewed annually. Remuneration is offered as fixed and variable in line with SYSC 19G and MIFIDPRU, with variable pay adjusted considering capital, liquidity, and firm performance. Senior Management annually reviews remuneration strategy and levels.
Pursuant to MIFIDPRU 8.6.8(2) the total amount of remuneration awarded to staff in the reporting period including a breakdown of fixed remuneration and variable remuneration can be obtained by contacting Man Yuk Wong ( rwong@lcmcommodities.com).
Given the firm’s size, the Board sets remuneration for all employees. The policy aligns with the firm’s strategic objectives to reward performance while promoting diversity within management. LCMC UK regularly monitors fixed-to-variable compensation ratios to ensure compliance with SYSC 19G and MIFIDPRU requirements. As of 31 December 2024, no remuneration shortfalls have been identified.
We are committed to providing the highest level of service to our clients. We value feedback and take any expression of dissatisfaction seriously. Our Complaints Policy outlines how we handle and resolve any concerns you may raise.
If you are dissatisfied with any aspect of our service, you may contact LCMC UK's Compliance Officer.
Compliance Officer: Man Yuk Wong
Email:
rwong@lcmcommodities.com
Please provide the following information to help us investigate your complaint efficiently: