(Adds details in paragraph 2, 10-11)
By Clara Denina
LONDON, July 9 The London Metal Exchange and
technology firm Autilla teamed up on Wednesday to launch a
last-minute bid to run the new global silver price benchmark in
the closely fought contest to replace the 117-year old London
The Autilla/LME camp's proposal for an electronic system
will likely challenge a joint proposal from exchange operator
CME Group Inc and Thomson Reuters Corp, who are
also in the final running, sources who were not competing in the
process have told Reuters.
The London Bullion Market Association (LBMA), the industry
body coordinating the search for a new mechanism, said on
Wednesday the results of the high-profile process are likely by
the end of the week. It had been due earlier this week.
The winner will operate a new daily silver pricing benchmark
to replace London's century-old silver fix when it ends on Aug.
14 as regulatory scrutiny of price-setting intensifies across
The LBMA has been consulting with market participants since
May with the aim of producing a transparent electronic
alternative to the conference call that complies with toughened
"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.
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.
After a months-long consultation involving market
participants across the industry, the bid from CME and Thomson
Reuters Benchmark Services Ltd had been considered a strong
contender out of seven proposals, sources have told Reuters.
Thomson Reuters and the CME declined to comment.
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 ; and UK-based exchange-traded funds
provider ETF Securities.
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,
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.
(Additional reporting by Josephine Mason in New York; Editing
by Veronica Brown, Jane Baird, Jonathan Leff and Jonathan Oatis)