UPDATE 1-LBMA asks for bids to provide gold trading, clearing services

Fri Oct 9, 2015 10:27am EDT
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(Updates with comments, background)

By Clara Denina

LONDON Oct 9 (Reuters) - The London Bullion Market Association (LBMA) said on Friday it has formally asked exchanges and technology firms to bid for services such as a gold exchange or a clearing platform to make the London market more transparent and liquid.

"This is to investigate opportunities for greater market transparency through, for example, trade reporting and also increased trading efficiency via enhanced IT solutions," the LBMA said in a release.

Following 2014's shake-up of precious metals benchmarks, the LBMA commissioned consultancy EY to review the bullion market with a view to enhancing transparency and liquidity, while reducing costs.

"The review came up with a number of potential solutions," an LBMA spokesman said.

"We don't know what specific services each provider could offer, (but) we need to make sure the chosen solution is workable for the whole market," the spokesman said, adding that the companies invited to bid would be the same as for the benchmarks in 2014.

The group that the LBMA has set up to decide on the winning bid is made up of market makers including HSBC and JP Morgan and other banks involved in the bullion market as well as other firms.

London's bullion benchmarks, or fixes, were overhauled last year as regulatory scrutiny made price-setting among a handful of banks untenable.   Continued...