LCM UK Commodities LLP

MIFIDPRU Disclosures —2023

Contents

• Introduction
• Remuneration Policies and Practices
• Governance and Oversight
• Material Risk Takers (MRTs)
• Qualitative Criteria

Introduction

LCM Commodities UK LLP (LCMC) is Limited Liability Partnership (OC330545) whose principal activity is that of a matched principal commodities derivatives broker. LCMC is independent and provides a service to Professional Clients and Eligible Counterparties.

LCMC UK LLP was founded as a private partnership founded in 2007 and is based in London. LCMC UK LLP is owned by Edge Commodities Limited.

LCMC was authorised by the original Financial Services Authority (No. 587454), in June 2013, and currently holds the following permissions:

• Advising on investments
• Advising on P2P agreements
• Agreeing to carry on a regulated activity
• Arranging deals in investments
• Dealing in investments as an agent
• Dealing in investments as a principal
• Making arrangements with a view to transactions in investments

LCMC currently calculates its capital requirements applying the rules which apply to MIFIDPRU £75k SNI firm.

Remuneration Policies and Practices

LCMC is a small non-interconnected (“SNI”) Firm and therefore is required to apply general requirements within its remuneration policies and practices. SYSC 19G.2.4 explains that a firms’ policies and procedures must be appropriate and proportionate to the nature, scale and complexity of the risks associated with the firm’s business model and activities.

LCM Commodities remuneration policy, is based on the following principles that guide the compensation programs and consequent actions:

• Fairness and consistency with the responsibilities assigned and the capabilities demonstrated
• Alignment with the company strategies and with the defined objectives
• Competitiveness regarding practices and market trends
• Enhancement of merit and performance, in terms of results, behaviour and values acted
• Clear governance and compliance of regulatory framework

LCMC’s main policy is to offer competitive remuneration packages to all its employees. Market research (benchmarking) is conducted to enable the practices to be parallel in quality and value with the general conditions present within the market. No individual will be dependent on variable remuneration to an extent that that makes up their majority of their total remuneration.

The remuneration policy and related practices are determined with regards to common interests of partners, employees, and clients. LCMC’s remuneration policy consists of base salaries, as well as performance-based bonuses and benefits.

This policy is designed to attract, retain, and motivate staff at all levels, and is consistent with the objectives outlined in the business strategy through:

• An appropriate balance between variable and fixed component.
• A proper connection with the remuneration of individual performance and the company.

Fixed remuneration is determined by experience and aptitude for the role and reflects the staff members professional experience and organisational responsibilities as set out in their contract of employment with LCMC. This will be permanent, pre-determined, non-discretionary, non-revocable and not dependent on performance.

Variable remuneration is determined by contribution and performance within the last calendar year. It reflects the long-term performance of the staff member as well as performance against the staff member’s terms of employment.

LCMC ratio between variable and fixed components of the total remuneration, has been established to ensure that the components are appropriately balanced and that the fixed component represents a sufficiently high proportion of the total remuneration to enable the operation of a fully flexible policy on variable remuneration. This allows for the possibility of paying no variable remuneration component, which the firm would do in certain situations, such as where the firm’s profitability performance is particularly constrained, or where there is a risk that the firm may not be able to meet its capital or liquidity regulatory requirements.

The below table summarises the financial and non-financial criteria of performance used across the Firm in assessing the level of variable remuneration to be paid:

Governance and Oversight

LCMC’s senior management fully acknowledges its responsibilities with respect to this remuneration policy, including its overriding responsibility to ensure that this policy complies with the requirements of the MIFIDPRU Remuneration Code. Senior Management along with Compliance will review this policy on an annual basis, this being sufficiently frequent given the risks faced by the firm.

LCMC considers the current arrangements to be proportionate, given:

1. the low-risk nature of the firm’s business.
2. the small size of the firm and clear visibility of behaviour and contributions to the organisation that is available to the board; and
3. the transparency to the board of the process for determining remuneration and its outcome.

This policy will be reviewed by the Compliance Officer and an external consultancy Compliance Officer on an annual basis to determine whether it has been implemented correctly and in line with the firm’s business strategy, reflects the risk profile, long-term objectives other relevant goals of the firm and compliance with all relevant legal requirements. Following this internal review, the results will be documented including findings and remediation actions.

Material Risk Takers (MRTs)

As LCMC is classified as a SNI-Firm then they are not required to determine their MRT’s. If LCM’s position changes, then this will be reviewed.

Qualitative Criteria

The below table quantifies the remuneration paid to staff in the financial year 1 January 2023 to 31 December 2023. For these purposes, ‘staff’ is defined broadly, and includes, for example, employees of the Firm itself, partners or members, employees of other entities in the group, employees of joint service companies, and secondees: