UPDATE 1-Death of silver fix heralds overhaul for precious metal benchmarks
(Updates with details on LBMA consultation, paragraphs 16-17)
By Clara Denina and Jan Harvey
LONDON May 16 (Reuters) - London's precious-metal price benchmarks, including silver, the century-old gold "fix" and platinum group metals are on the verge of major transformation, industry sources say, as regulatory scrutiny and lawsuits hasten action.
Customers of the daily London silver fix, used as a global benchmark, were shocked this week when its operator said it would stop administering the 117-year-old process on Aug. 14.
The move came after Deutsche Bank, a member of the gold and silver fix for two decades, failed to attract a replacement after putting its seat up for sale.
While the development looked abrupt to customers, watchers of the backdrop around benchmarks after the Libor rate-rigging scandal see change as inevitable.
"The future of benchmarks and how they are being put together is now in the balance," said Clive Furness, managing director of Contango Markets Ltd.
"I think it's essential that we have a set of proper, definitive guidelines for index creation and maintenance that are accepted around the marketplace. Hearsay reporting on markets is not good enough anymore," he added.
In years gone by, seats at the gold and silver fixing tables were a mark of distinction for a bullion bank, a sign that its business was deep and respected enough to take a hand in setting the leading global benchmarks. Continued...