LONDON (Reuters) – A hedge fund association has complained to the London Metal Exchange (LME) about the suspension of the nickel market and cancellation of nickel trades in March saying the exchange failed to meet its regulatory obligations.

Benchmark nickel on the LME doubled to a record above $100,000 a tonne in disorderly trade on March 8 on expectations China’s Tsingshan Holding Group and others would have to buy back their short positions – bets on lower prices.

“The LME has undermined confidence in its ability to oversee markets by failing to perform its regulatory obligations to maintain an orderly market, manage conflicts of interest and protect investors in the nickel market,” the Managed Funds Association (MFA) said.

“As an important provider of liquidity in the metal markets, the alternative asset management industry encourages the LME to take swift action to redress these regulatory shortcomings.”

The LME did not immediately respond to a request for comment.

Following the suspension, UK financial regulators in April launched a sweeping probe into how the LME suspended the nickel trading, a move that prompted angry protests from market participants and damaged the exchange’s reputation.

U.S. hedge fund Elliott Associates and Jane Street Global Trading are suing the LME for $456 million and $15.3 million respectively for cancelled nickel trades.

The LME is also commissioning its own review aiming to identify actions to minimise the risk of a disorderly market in future.

“We note as a preliminary matter that the suggested scope of the independent review…does not address some of the points we make in our (complaint), including the proper relationship between LME and LME Clear,” said the MFA, which represents more than 150 firms which together manage nearly $2.6 trillion.

Metal industry sources have highlighted the potential conflict of interest with the LME owning its clearing house.

The exchange has not yet made any announcement on when the review will start or when the market can expect the results.

(Reporting by Pratima Desai; editing by Emelia Sithole-Matarise)