Six banks to participate in new ICE gold benchmark, no Chinese yet

Mar 19, 2015 - 9:15 AM GMT

There wil be six direct participants in ICE’s new gold price benchmarking process that is due to start on Friday, the exchange said during a briefing at its offices here on Thursday.

Scotiabank, HSBC, Societe Generale and Barclays were all confirmed as particicpants; ICE declined to identify the other two parties.

Although some Chinese banks are said to be interested in joining several of the traditional members of the current fix in the new system, the exchange said none will be involved tomorrow while they continue to work on documentation

Rumours have circulated that one of those banks is Industrial and Commercial Bank of China (ICBC), one of the biggest banks in the world and a major participant in the gold market.

The LBMA Gold Price will formally replace the near-century-old London Gold Fix on March 20.

The twice-daily gold fix, which has been in operation since September 12, 1919, has come under increased regulatory and media scrutiny. A third-party operator is seen as a critical step in modernising the image of the benchmark process, while also providing enhanced transparency and compliance with legislation.

London-based ICE subsidiary ICE Benchmark Administration (IBA), which was established in April 2013 to administer benchmarks, will provide the price platform, methodology and overall administration and governance for the LBMA gold price.

Via IBA, ICE administers Libor and ISDAFIX, which is already Iosco-compliant. Some market participants stressed the importance of this in the eyes of both the LBMA and the UK’s Financial Conduct Authority (FCA).


(Editing by Mark Shaw)