Alcoa will meet CFTC to challenge LME warehouse reform

(Recasts to lead with Alcoa (NYSE: AA - news) 's challenge)

NEW YORK, Aug 25 (Reuters) - Alcoa Inc will challenge the chairman of the U.S (Other OTC: UBGXF - news) . commodities regulator on its authority to interfere in the London Metal Exchange's warehousing reform at a meeting on Wednesday, a spokeswoman said on Tuesday.

The meeting between U.S. Commodity Futures Trading Commission (CFTC) chairman Timothy Massad and Alcoa Executive Vice President and Chief Financial Officer Bill Oplinger comes after Alcoa ramped up public criticism of the regulator's intervention in the LME's warehousing reform plan.

"We are attending the meeting because we believe the CFTC should refrain from any comment or judgment on, or interference with, LME rule changes," an Alcoa spokeswoman said on Tuesday.

A CFTC spokesman confirmed the meeting and Massad's attendance.

The dispute highlights aluminum producers' concerns about the impact of LME rule changes on sinking prices. Recent LME reforms have increased the rate at which metal must be delivered out of warehouses, a response to controversial financing deals, and aluminum has flooded the market partly as a result.

In a letter late last month, Alcoa general counsel Max Laun asked the CFTC to retract a letter announcing its decision to delay ruling on the LME's application to register as a "foreign board of trade" in the United States.

The letter accused the CFTC of overstepping by attempting to regulate a foreign exchange while pushing for the LME, the world's oldest and biggest market for industrial metals owned by Hong Kong Exchanges and Clearing Ltd to introduce other reforms, including a cap on warehouse rents.

Alcoa met with the CFTC several times before submitting a request under the Freedom of Information Act in June to find out what had caused the CFTC to delay its decision on the LME, but those meetings had been with lower-level staff. (Reporting by Luc Cohen, editing by Bernard Orr)