By Eric Onstad
LONDON, March 28 (Reuters) - The London Metal Exchange (LME) pressed on with reforms to its warehousing network on Friday, unveiling tighter "Chinese Wall" restrictions a day after a court ruling forced the LME to halt a plan to cut delivery backlogs.
The LME said it would bolster rules on firms that both trade on the exchange and own metals warehouses to ensure there was no improper flow of information or conflict of interest.
It aims to carry out a consultation regarding the proposed changes and to introduce them in January 2015.
The rules apply to parties such as bank Goldman Sachs and commodity group Glencore, which both trade metals and own metals storage facilities.
The LME, owned by Hong Kong Exchanges and Clearing , said in a statement that an external review found current restrictions between traders and warehouses were generally adequate.
"The review has, however, helpfully recommended certain modifications to the existing requirements which the LME believes will further enhance certain aspects of the information barrier requirements," it said.
This would "protect confidential information held by warehouse companies, the possession of which by third parties (including trading companies) could otherwise give rise to conflicts of interest and, potentially, market abuse".
It proposed strengthening a rule requiring people to notify the exchange if there were any reasonable grounds to suspect that the barriers were being violated.
It also aims to introduce requirements which would ensure employees returned confidential information when they stopped working for warehouse firms.
The moves are part of a sweeping reform plan launched last November by the world's biggest marketplace for industrial metals such as copper and aluminium to cut queues for metal and protect against market abuse.
On Thursday, the LME was forced to halt a plan to speed up delivery of metals, however, after Russian aluminium producer Rusal won a court decision which deemed the LME's consultations "unfair and unlawful".
(Reporting by Eric Onstad; editing by Jason Neely)