FREE ARTICLE PREVIEW: You are enjoying a free sample of exclusive
subscriber content. There is a limit of three free articles per week.

DAILY NEWS Jun 25, 2014 7:21 PM - 0 comments

LBMA works to replace London silver fix

TEXT SIZE bigger text smaller text
2014-06-25

It looks like the vacuum that would be left by the coming demise of the venerable London Silver Fix on August 14 will be quickly filled.

The London Bullion Market Association (LBMA) has held a closed-door meeting with 140 members and other interested parties to present seven options to replace the daily silver fix, which started in 1897 but ran out of steam in recent months, as only two members — HSBC and Bank of Nova Scotia — were left to administer it after third member Deutsche Bank announced its exit from commodities.

The seven options relate to seven disparate organizations (a short list from 10 applicants) that are vying to become operators of the LBMA’s new official silver pricing mechanism: Autilla Ltd. (Cinnober Financial Technology of Sweden), Bloomberg, CME Group (Thomson Reuters), ETF Securities, Intercontinental Exchange, London Metal Exchange and Platts.

The LBMA has put summaries of the seven proposals on its website at: http://www.lbma.org.uk/_blog/lbma_media_centre/post/lbma-2014-silver-price-consultation-seminar/ .

The LBMA expects a market consensus will be announced in early July, after consultation with regulators. It says the solution provider will then develop the daily silver-price mechanism with assistance from the LBMA. After testing in early August, the solution will go live on Aug. 15, 2014.

In early June, the LBMA sent out a survey regarding the silver fix issue to its members and interested parties, and 440 participated in the survey. From the survey, the LBMA said the consensus was that the new silver-pricing mechanism "should be an electronic, auction-based solution. The solution must be tradeable, with an increased number of direct participants."

The responses to the LBMA’s survey questions were: Q1 - For your current business model, how useful is the current London silver-price mechanism? The average score was 7.5 (out of 10); Q2 -  How often do you use the silver-price mechanism? Daily 64%, periodically 24%, never 7% and n/a 5%; Q3 - Is the silver-price discovery method sufficient? Yes 72%, no 28%; Q4 - Would you consider acting as a contributor? Yes 25%, no 44% and maybe, 31%.



© 1915 - 2014 The Northern Miner. All Rights Reserved.




Horizontal ruler
Horizontal Ruler

Post A Comment

Disclaimer
Note: By submitting your comments you acknowledge that Northern Miner has the right to reproduce, broadcast and publicize those comments or any part thereof in any manner whatsoever. Please note that due to the volume of e-mails we receive, not all comments will be published and those that are published will not be edited. However, all will be carefully read, considered and appreciated.

Your Name (this will appear with your post) *

Email Address (will not be published) *

Comments *



* mandatory fields