Commercial loan rate

Despite some problems, however, the low-key regulatory approach is appropriate, given the wholesale and trade-based nature of most UK futures exchange business. It is an approach that encourages the exchanges themselves to stay within the system rather than moving offshore. In the US, in contrast, exchanges are more orientated towards domestic retail business, and this encourages more extensive government supervision. Another attraction in being an RIE is its " status ", in the eyes both of exchange participants and government authorities; here, RIE and exchange status are indeed much the same thing, both in theory and practice.

Any market may claim to be an exchange and may provide some or all of the key features of an RIE such as liquidity or transparency. But a formally established exchange can also claim to have made a formal (and, in the case of an RIE, a legally binding) commitment to establish and maintain such features. Unlike a trade association or informal market, an exchange is expected to carry out regulatory as well as trading functions. The exchange structure enhances, or is at any rate available to enhance, " investor confidence ", by its special " market integrity ". In addition, RIE recognition imports a public body quality, together with any advantages that attach to this status. This situation has only evolved gradually. The original exchange brought traders together on a single floor. In a pre-computer (still more in a pre-telephone) age, this physical concentration offered maximum liquidity and (if the members chose) transparency as well.

t also had many of the features of a private club, operated and run for the benefit of its members. As exchanges assume a more formal role, and seek new means to means to distinguish themselves from off-exchange business , they increasingly have to take note of a wider spectrum of interests, including off-exchange traders, customers, financiers, and the public interest itself. All these issues take concrete form in the exchange's rules and regulations. As trading becomes less and less directly connected with physical trading floors, or even a particular trading system, the rulebook becomes more and more the key determinant of the exchange's identity and objectives. There is no fixed boundary to the scope of the rules, apart from the natural limits of contract law.

Conventionally the rules should be confined to what are conceived as the exchange's affairs. But they can still be drawn very widely. LIFFE, for example, has rules that impose capital requirements on its members, prescribe the content of customer agreements, and provide for inspection and monitoring visits to members' premises, even though these functions are primarily dealt with by the SFA and the clearing house. Under LME rules, any business done by a member " under the rules " is treated as exchange business, even where this takes place away from the exchange floor on a bilateral basis between a member and a third party. Nature of exchange rules In the UK, exchange rules are a commercial contract between the parties. The exchange itself is a limited company, with its own distinct legal identity, and enters a contract in its own right. The exchange is owned by its shareholders, who form a separate membership. Where this " owning " membership is not synonymous with the " trading " membership, the results can be complicated.