| LONDON, July 9
LONDON, July 9 The London Metal Exchange and
technology firm Autilla joined forces on Wednesday to propose an
electronic system for setting the global silver price benchmark
as the deadline neared for replacing London's century-old silver
The 117-year-old price benchmark, or fix, will come to an
end on Aug. 14, operator London Silver Market Fixing Limited
said in May, as regulatory scrutiny of price-setting intensifies
The silver fix is set every day at noon by three banks via
a conference call, working out a price at which their customers
are willing to buy and sell the metal.
The London Bullion Market Association (LBMA) has consulted
with market participants since May with the aim of producing a
transparent electronic alternative to the conference call that
complies with toughened regulatory standards.
"Throughout the LBMA's process, the market has consistently
indicated that Autilla's technology and the LME's compliance and
price discovery systems are market-leading," LME Chief Executive
Garry Jones said in a statement.
The LME and Autilla, run by former brokers and traders from
some of the fixing banks, had originally presented separate
The exchange had said it would use its electronic platform
LMESelect, which was already available to LBMA market-makers
such as JPMorgan and Societe Generale.
The LBMA said an announcement was likely by the end of the
Members of the association, which count gold and silver
fixing banks and other large bullion-trading banks, discussed
the seven original proposals at a meeting on Friday, without
reaching any decision.
Other bidders include
The Chicago Mercantile Exchange (CME) also has
joined forces with Thomson Reuters Benchmark Services Ltd, part
of Thomson Reuters Corp .
Other bidders include U.S. derivatives exchange
Intercontinental Exchange (ICE), U.S. news agency
Bloomberg, commodity price benchmark provider Platts, a unit of
McGraw Hill Group, UK-based exchange-traded funds
provider ETF Securities have also presented their proposals.
The banks involved in the current silver fixing process are
Deutsche Bank, HSBC and Bank of Nova
The LME currently provides clearing of over-the-counter
silver forward rates in conjunction with London clearing house
LCH.Clearnet, which are marked to market using the LBMA forward
"The solution will be ready for testing from 14 July, with
implementation and roll-out to begin in early August," the
An electronic solution to the silver fix could be applied to
price-setting for gold and platinum group metals as well,
(Editing by Veronica Brown and Jane Baird)