* Gold fix company to detail new code of conduct
* New administrator, chairperson sought for gold fix
* RFP process unlikely to be launched before new silver fix
By Clara Denina
LONDON, July 25 The company operating the gold
price 'fix' has appointed a supervisory committee to oversee the
century-old system of benchmarking gold prices ahead of the
implementation of stricter regulations, its website showed on
The London Gold Market Fixing Ltd's new board is made up of
compliance officers at the four banks that currently set the
twice-daily auction process over the telephone.
The appointment of the committee comes after the company
said this month it was seeking a third party to take over
administration of the process.
Other changes, which will include a new code of conduct for
participants and the appointment of an independent chairperson,
are widely seen as the first steps toward a move to an
electronic platform which will broadcast it to a wider audience.
A similar process to find a new price benchmark
administrator recently took place in the silver market. That
yielded an electronic auction mechanism to replace a daily
conference call with just three banks.
The gold fixing company said it would launch a request for
proposal (RFP) process to find the new administrator for the
benchmark. Two sources close to the matter said that this is
unlikely to start before market participants see the new silver
process get under way from August 15.
Bank of Nova Scotia, HSBC, Societe
Generale, and Barclays operate the gold
fixing, while Deutsche Bank stopped in May after two
The new committee will promote the implementation of a code
of conduct and will devise a process for reviewing the conduct
of the fixing by including post review of the recordings and
scrutiny of the submission process, the company said on its
It will also be responsible for assessing any potential
conflict of interest or complaints about the fixing process.
Regulators across Europe and the United States have
scrutinised financial benchmarking processes following the Libor
manipulation case in 2012 and firms have been fined billions of
Although market participants view many aspects of the
existing gold process favourably, reforms still need to comply
with the 19 principles on financial benchmarks outlined in July
2013 by the International Organization of Securities Commissions
(IOSCO), an umbrella group of market regulators.
The first phase of the IOSCO principles, which all
benchmarks should follow, ends in July.
IOSCO has six months to decide if any further action is
appropriate, based on the take-up of the benchmark
administrators to these principles, the regulator said.
The new committee will recommend reviews of the gold fixing
process to make sure it is compliant with the IOSCO principles,
The London Gold Market Fixing Ltd was founded in 1994 but
only since 2011 have organisations wishing to reproduce or
utilise gold fixing data been required to purchase a licence
from the company.
(Editing by Susan Thomas and Jason Neely)