UPDATE 2-CME, LME compete to provide alternative to London silver 'fix'

Thu May 29, 2014 1:01pm EDT
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* Exchanges working on replacements for silver benchmark

* Silver fix in current form due to end on Aug. 14

* LBMA running consultation with industry on alternative (Adds background, detail on LME, paragraphs 14-16)

By Clara Denina

LONDON, May 29 (Reuters) - Major metal exchanges emerged as contenders in developing an alternative to the London silver price benchmark, or "fix", after the century-old system for setting the globally recognised price is disbanded in August.

The Chicago Mercantile Exchange (CME) and the London Metal Exchange (LME) both said on Thursday they were working with the London Bullion Market Association (LBMA) and the precious metals industry to find an electronic-based solution.

"We are working closely with the precious metals industry and the LBMA to reduce market disruption by helping to find a robust transaction-based way to set the daily spot price, so the markets can continue to work efficiently and seamlessly," Harriet Hunnable, CME managing director of metals products, said in a statement.

Meanwhile, the LME said it had received numerous requests from industrial and financial players to provide a new solution.

"The LME ... is working with the LBMA in consulting with the market ... it has defined a robust process for a daily silver price, which will provide best-practice regulatory compliance while maintaining the global position of the London market," the exchange operator said in a statement.   Continued...