UPDATE 2-London gold fix company seeks third party to run benchmark

Wed Jul 16, 2014 11:57am EDT
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* New administrator, chairperson sought for gold fix

* Gold fixing company launches request for proposals

* New process put in place for silver fix last week (Releads, adds background, detail)

By Jan Harvey and Clara Denina

LONDON, July 16 (Reuters) - London Gold Market Fixing Ltd, the company operating the century-old global price benchmark known as the "fix", said it is seeking a third party to take over administration of the process, possibly signalling a move to an electronic platform.

The company, working on behalf of gold fixing banks Barclays , HSBC, Societe Generale, and Bank of Nova Scotia, said it had launched a request for proposal (RFP) process with a view to appointing a new administrator for the benchmark, supported by the London Bullion Market Association (LBMA).

"It is sensible to say that based on the feedback received for the silver alternative, the reformed gold system will also be electronic, auditable and transaction-based," an LBMA spokesman said.

A similar process to find a new price benchmark recently took place in the silver market. That yielded an electronic auction mechanism to replace a daily conference call with just three banks.

The gold fix, along with other financial benchmarks, has been under increasing regulatory glare in the wake of the Libor rate-rigging scandal. Detractors have criticised the process as being vulnerable to manipulation.   Continued...