Silver Fix Benchmark Replacement Should Be Announced Early July

Jun 19, 2014 6:32 am ET

June 19 (Bloomberg) -- The replacement for the 117-year-old London silver fixing benchmark that’s ending in August should be agreed by the market and announced in early July, according to the London Bullion Market Association.

LBMA members will hear proposals tomorrow on alternatives from Autilla Ltd., Bloomberg LP, CME Group Inc./Thomson Reuters, ETF Securities Ltd., Intercontinental Exchange Inc., the London Metal Exchange and Platts, it said in an e-mailed statement today. Participants in the seminar and consultation can give feedback in a follow-up survey and the LBMA will ask members to confirm which solution they’ll participate in from Aug. 15.

The London Silver Market Fixing Ltd. will stop running the fixing on Aug. 14, as Deutsche Bank AG’s planned exit as it scales back its commodities business would leave just HSBC Holdings Plc and Bank of Nova Scotia to conduct the price- setting ritual that takes place each day at noon by phone. The LBMA will help the chosen provider to develop a new mechanism, with testing planned in early August, it said.

“It is important that the market engages in the LBMA’s consultation and indicate which mechanism they would be willing to accept, and most importantly, to participate in,” Ruth Crowell, chief executive of the organization, said in the statement. “Only with market engagement can a solution work in practice.”

The U.K.’s Financial Conduct Authority and the Bank of England will attend tomorrow’s seminar as observers. July’s announcement will follow consultation with regulators. Presentations will begin at about 12:30 p.m., and the LBMA will release summaries to the media early next week, it said.

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