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IBA & LBMA announce March launch of LBMA Gold Price

First Published 2nd February 2015

ICE Benchmark Administration to administer the London Bullion Market Association Gold Price from March 2015; LBMA Gold Price to replace the London Gold Fix.

Finbarr Hutcheson, ICE Benchmark Administration

Finbarr Hutcheson, ICE Benchmark Administration

"Expanding the number of participants in the auction will increase the transparency and robustness of the data used to calculate the benchmark."

London - Intercontinental Exchange and the London Bullion Market Association (LBMA), have announced that the new LBMA Gold Price, which replaces the long established London Gold Fix, is expected to be launched in March 2015. As announced by the LBMA in November 2014, ICE Benchmark Administration (IBA) will officially become the administrator of the new pricing mechanism.

As the administrator for the LBMA Gold Price, IBA will transition to a physically settled, electronic and tradeable auction, with the ability to participate in three currencies: USD, EUR and GBP. Within the process, aggregated gold bids and offers will be updated in real-time with the imbalance calculated and the price updated every 30 seconds. IBA will use ICE's front-end, WebICE, as the technology platform which will allow direct participants, as well as sponsored clients, to manage their orders in the auction in real time via their desktops.

Finbarr Hutcheson, president, ICE Benchmark Administration said: "Following the LBMA's announcement in November we have been working closely with the precious metals industry to further enhance the benchmark. We are encouraged by the number of firms who have shown interest in being participants in the new, electronic auction. Expanding the number of participants in the auction will increase the transparency and robustness of the data used to calculate the benchmark, giving a better representation of the market price."

Ruth Crowell, Chief Executive, LBMA said: "I'm delighted to see a high level of interested participants for the March launch. The intention and the interest has been very positive and creates a more diverse pool of participants which includes Chinese banks. We look forward to having enhanced numbers of participants for day one for the LBMA Gold Price".

The LBMA Gold Price replaces the Gold Fixing Price that has been in existence since September 1919.

The LBMA Gold Price will be subject to high regulatory standards and from April 1, 2015 the benchmark will be regulated by the FCA, in addition to bringing the benchmark in line with the IOSCO Principles.