LME Market Data Licence Agreement FAQs Distribution Please respond to: market.data@lme.com THE LONDON METAL EXCHANGE 10 Finsbury Square, London EC2A 1AJ Tel +44 (0)20 7113 8888 Registered in England no 2128666. Registered office as above. LME.COM
1 Introduction The London Metal Exchange s (LME s) Market Data Licence Agreement for Distribution is required by any firm who wishes to redistribute LME Data 1 externally to third parties. Firms (licensees) may choose to distribute LME Data to customers in any of the products/packages set out in the LME Price List, subject to annual licence fees and relevant monthly subscriber fees. The LME is updating its standard distribution licence terms and conditions which will involve the migration of all existing real time and 30 minutes delayed data vendors, with some of the key changes having the following objectives: Standardisation of core terms and structure across all LME Market Data licences; Compliance with regulatory obligations specifically under MiFIR / MiFID II and the European Benchmark Regulation; Alignment with industry developments and best practices; Modernise the vendor application process and on-going contract management by utilising the LME Portal; Clarity on the different types of data usage, licensing requirements, fees and reporting obligations; Greater flexibility to launch new products, content and policies. 2 How will the new terms be rolled out and will the existing terms be terminated? Existing LME and/or LBMA PGM data vendors will be issued notice of amendment of their current licence agreement, providing an extended period for migration onto the new terms. Vendors will initially be required to register on the LME Portal and accept the LME Portal terms of use. Once you have created an account on the LME Portal you will be required to go through the licence application process. As part of the application process, vendors will need to provide up to date company information and contact details as well as the Affiliates to be licensed under the agreement, and the services offered by the licensee, which will generate the Order Form. The Order Form can be executed electronically or alternatively in hard copy, and then uploaded to the LME Portal. Any subsequent update to any information for the purposes of the licence, including to Affiliates, will need to be processed through the LME Portal. 3 How are the terms structured? The new terms introduce some new documents which form the overall agreement. These are as described below: 1 Capitalised terms are as in Market Data Licence Agreement - Distribution Page 2
Order Form (Generated and executed on the LME Portal - confirms the Licensed Data, Permitted Use and Fees, providing information specific to each customer. The Order Form is where the agreement is executed) LME Policy (Applies to all distribution licensees, provides more detail around reporting, payment etc.) Audit Policy (Common across licence types, sets out process of auditing and who can be audited) LME Portal Terms (Standalone terms that customers must agree to when registering on LME Portal) LME Market Data Licence General Terms (Common across market data licence types, covers general terms such as definitions, fees, warranties and liability, intellectual property rights etc.) Schedule 1 Licensed Data (confirms the data that can be licensed) Schedule 2 Permitted Use Terms (confirms what the licence permits the customer to do) Schedule 3 Price List (confirms the fees that could be due under the licence) 4 Will the LME enter into negotiations with firms on the agreement, or accept any amendments? The LME has been careful to produce new terms that are fair, reasonable and non-discriminatory, and as such, is unable to accept any changes or amendments to the standard terms. The new terms have been carefully drafted to consider various users and best practice in the industry therefore in order to maintain a standard and fair approach to licensing, the LME cannot agree to changes on a case by case basis. 5 What has changed from the previous same day data distribution licences? 5.1 Permitted Use The LME is not changing the general licence provisions that allow redistribution of the Data to third parties/subscribers however the new agreement will provide greater clarity on how distributors and subscribers are permitted to use the Data under the licence. These specific provisions can be found in Clauses 2, 3 and 4 of Schedule 2 (Permitted Uses) of the new terms. 5.2 Subscriber Permitted Use Any access, use and/or distribution of LME Data is subject to terms of use which the LME outlines in its various market data agreements. Page 3
Licensees are reminded of their obligation to advise their subscribers when additional licensing is required. As a reminder, additional market data licensing is required for firms who wish to: Distribute Data to third parties (whether it be real time, 30 minute, next day delayed or any other class of distribution as set out in the Price List); Create derived data products (including but not limited to creation of indices, ETPs or CFDs); Use Data as a reference for trading, clearing and/or settlement of contracts other than LME contracts including pricing and valuation activities; Publish Data for media or news products. 5.3 Fees There are no changes to the current 2018 annual licence and monthly subscriber fees; however a Level 1 product has been introduced for LMEsource 2. The roll-out of the new terms will require some changes as to the reporting of Data Products and how the subscriber fees are applied. Any fees that have already been paid up-front by the vendor will be transferred on a prorated basis over to the new agreement. The new Level 1 Data Product is only available for distribution from LMEsource. 5.4 Unit of Count The new terms introduce more granular definitions for the different methods of processing and distributing the Data, the key definitions being: Authorised Device; Subscriber Device; Subscriber Application. In addition the new terms seek to identify where natural persons access and view the Data (see definition of User in Schedule 2 - Permitted Uses) and also includes a Unit of Count concept to clarify how subscriber fees are to be calculated. 5.5 Reporting There have been some changes made to reporting under the new Market Data Licence Agreement for Distribution. For reference, a summary of reporting codes, with new requirements highlighted can be found in Appendix 1. Introduction of Level 1 reporting arrangements for data from LMEsource; Introduction of some new reporting codes for existing products; Internal use of data is now reportable, with more guidance around what constitutes internal use; Reporting to be submitted to TCB Data by 15 th of the calendar month for the previous month. Further information regarding reporting can be found in the LME Policy. 2 https://www.lme.com/trading/systems/lmesource Page 4
6 Derived Data Licensing 6.1 What is a Derived Data Licence? Customers who would like to receive LME data for the purpose of manipulating it or combining it with other data in order to create derived information or a derived product, such as an index, may require a Derived Data Licence. This covers creation of products such as indices, CFDs and ETPs. 6.2 When would a Licensee (data distributor) require a Derived Data licence? Where Licensees provide Derived Data to Subscribers in conjunction with the underlying LME Data, provided the relevant Subscriber Fees are paid and the Subscriber is subject to a Subscriber Agreement, a Derived Data licence is not required. If the Licensee provides customers with Derived Data products as a separate commercial activity outside of standard distribution of the Data, a Derived Data licence may be required. 6.3 When would Subscribers require a Derived Data licence? Subscribers may require a Derived Data licence if they use Derived Data for anything other than limited internal use, or if they create new Derived Data from the Data received by any means. 7 Usage Licensing 7.1 What is a Usage Licence? A licence is required by any firm that uses LME or London Bullion Market Association Platinum and Palladium (LBMA PGM) data or trademark(s) for either of the following uses, other than for limited internal business use: For valuation and/or pricing activities; and/or As a reference price in transactions. 7.2 When would a Licensee (data distributor) require a Usage Licence? If a Licensee uses LME or LBMA PGM Data in any valuation and/or pricing activities, or as a reference price in transactions, a Usage Licence may be required, including for separate commercial activity outside standard distribution of the Data. A Usage Licence would not be required if Licensees services include tools and functionality allowing Subscribers to conduct pricing and valuation activities using the Data, provided the relevant Subscriber Fees are paid and the Subscriber is subject to a Subscriber Agreement. Subscribers may require a usage licence if they use this service for anything other than limited internal use. 7.3 When would Subscribers require a Usage Licence? Any Subscriber using LME or LBMA PGM Data in any valuation and/or pricing activities, or as a reference price in transactions, a Usage Licence may be required. Page 5
8 Other Distribution Licences 8.1 What other licences are available? Customers who would like to display Data in an access controlled environment (for example, an office wallboard or screen), would require a wallboard licence. Customers who wish to broadcast Data via media channels and news services, including, (but not limited to) websites, TV channels and broadcasters, may require a media licence. 8.2 When may a Licensee require further licensing? If a Licensee is using Data as part of a separate Service that is not covered by the Agreement, such as a news service, a further licence may be required. 8.3 When may a Subscriber require further licensing? Any onward distribution of Data by the Subscriber requires further licensing, whether that be a Next Day Distribution Licence, Media Licence or Wallboard Licensing. Page 6
APPENDIX 1 REPORTING CODES 3 Data Product Access Type Device Application Device Trial Application Trial Internal use Real Time LME-RT LME-RT-DF LME-RT-F LME-RT-DFF LME-RT-I Real Time Redistributor 4 LME-RT-S 30 Minute Delayed LME-DL LME-DL-DF LME-DL-F LME-DL-DFF LME-DL-I 30 Minute Delayed Redistributor ³ LME-DL-S Level 1 LME1 LME1-DF LME1-F LME1-DFF LME1-I Level 1 Redistributor ³ LMEprecious Real Time LMEprecious Real Time Redistributor ³ LMEprecious 30 Minute Delayed LMEprecious 30 Minute Delayed Redistributor ³ Real Time Pre-Trade Redistributor ³ LME1-S Not currently reportable LMP-RT-S Not currently reportable LMP-DL-S LME-RT-PR-S LBMA LBM-PM LBM-PM-DF LBM-PM-F LBM-PM-DFF LBM-PM-I LBMA Redistributor ³ LBM-PM-S 3 Codes in red are new requirements 4 Must have separate licence with LME Page 7