The financial watchdog and the Bank of England have launched a probe into the suspension of nickel trading by the London Metal Exchange (LME) last month.

The exchange suspended nickel trades from Tuesday, March 8, after Russia's invasion of Ukraine resulted in significant volatility, with prices doubling to more than $100,000 per ton within an hour.

Traders also expressed frustration over a spate of technical glitches after trading resumed on Wednesday, March 16.

The Financial Conduct Authority (FCA) has said it now plans to "review the LME's approach to managing the suspension and resumption" of the nickel market.

The Bank of England said it will undertake a review into the LME's clearing house during the period "to determine whether any lessons might be learned in relation to its governance and risk management."

In a joint statement, the organizations said the chaotic episode underlined questions about the exchange's transparency.

The central bank and the FCA said they will determine if action needs to be taken as a result.

"Events around the suspension and resumption of trading have underlined questions raised in a recent LME discussion paper on market structure, particularly the role of transparency in the LME and related markets," they added.

"The FCA has been in discussion with the LME on its proposals for some time and expects the LME to consider carefully how recent events should shape its future approach on market structure."

In a statement, the LME Group said it "welcomes" the announcement by the regulators.

"In addition, the LME Group will commission an independent review of broader events in the nickel market leading up to the suspension to identify any actions that could be taken to minimise the risk of a disorderly market arising in future," it added.