Following the market consensus that has recently emerged, the LBMA is pleased to announce that CME Group & Thomson Reuters have been selected to provide the solution for the London Silver Price mechanism.
This consensus was gained during the LBMA’s market consultation which involved two market surveys, a seminar and numerous meetings with market participants, solution providers and regulators. The second survey indicated a clear market consensus for the CME Group & Thomson Reuters proposal. The price mechanism meets the LBMA Request for Proposal process criteria as it is electronic, auction-based and auditable. It is also tradeable with an increased number of direct participants. The criteria was based on the feedback provided from market participants who contributed to the first survey.
This market consensus was also supported by the independent review conducted by Jonathan Spall of G Cubed Metals Ltd. As part of his review, Jon carried out in-depth interviews with the seven companies who delivered presentations at the seminar on the 20th June. Feedback from the surveys, the seminar together with the conclusions of the independent review were presented directly to a meeting of the LBMA Management Committee, LBMA Market Makers and the Data Working Group.
In terms of the division of responsibilities, CME Group will provide the price platform and methodology and Thomson Reuters will provide the administration and governance. The LBMA will develop a process of accreditation for silver price participants. The legal aspects of this division of responsibilities will be finalised prior to go live. In the meantime the LBMA will work closely with the CME Group and Thomson Reuters to prepare the London Silver Price mechanism for testing in early August.
Ruth Crowell, Chief Executive of the LBMA commented
“I am delighted that there was a clear market consensus for the CME Group & Thomson Reuters joint proposal. The LBMA liaised throughout the consultation process with the FCA. The LBMA is grateful for all the support, comments and feedback it has received from all market participants. A particular thank you to ISDA, and the Silver Institute for all their constructive support of the LBMA during this consultation process. We will work in partnership with the CME Group, Thomson Reuters and price participants to implement the solution in time for testing in early August and go live on the 15th August.”
