The London Metal Exchange has successfully launched LMEshield, its new tool which issues and manages electronic receipts relating to commodities stored off-warrant, the LME said Thursday.
The first receipt was issued by Henry Bath & Son on behalf of BNP Paribas Arbitrage, the exchange said.
At go-live, LMEshield is available in 19 jurisdictions, including countries new to the LME storage network such as India, South Africa and Chile.
The LME said it has "ambitious" plans to expand the LMEshield network, with further eligible jurisdictions and commodities to be added in due course.
Last month, the exchange entered into a strategic alliance with Henry Bath & Son, CMST Development and Mercuria Energy Trading to list warehouses for LMEshield in regions along China's "The Belt and Road" routes.
"We recognize that there is a need for a reliable standard for warehousing worldwide," said Matthew Chamberlain, head of business development at the LME, in a statement.
"We are pleased to be able to extend the LME's experience in secure warranting beyond the LME network to improve confidence in global warehousing, provide protection against fraud and expand the market for commodities financing," he added.
Developed in partnership with software provider Kynetix, LMEshield is based on the same operating principles as the LME's existing warrant-transfer system, LMEsword, which monitors stocks related to deliveries made on the LME market.
The new system is available to LME members and non-members alike.
