Morgan Stanley, Standard Chartered join ICE London gold auction

June 22, 2015

London (Jun 22)  ICE Benchmark Administration has approved two new direct participants -- Morgan Stanley and Standard Chartered -- to participate in the gold auction, which is used to determine the LBMA Gold Price, parent company IntercontinentalExchange said Monday.

This follows last week's approval of Bank of China. All three new participants joined the auction process Monday.

"Since assuming administration of the LBMA Gold Price, IBA has grown the number of direct participants in the auction from four to 10," ICE said in a statement, adding that further new participants are expected in the coming weeks, including China Construction Bank which is on track to become the 11th direct participant.

"Volumes have also increased significantly, with average daily volumes for the morning and afternoon gold auctions more than doubling, compared with the five months prior to IBA's administration," ICE added.

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IBA operates twice daily, physically settled, electronic and tradable spot gold auctions at 10.30 a.m. and 3.00 p.m. UK time.

The price formation is in US dollars, with indicative settlement prices in euros and pounds sterling.

At the end of the auction IBA publishes the benchmark in USD, EUR and GBP.

The LBMA Gold Price was set at $1,193.70/oz Monday morning, down from $1,203.40/oz Friday afternoon.

Since April 1, the LBMA Gold Price is a regulated benchmark under the supervision of the UK Financial Conduct Authority.

IBA has implemented new governance procedures for the LBMA Gold Price, including an independent oversight committee comprised of a cross-section of the market, as well as surveillance processes and daily transparency reports.

"We continue to invest in new technology, surveillance and governance to evolve the benchmarks we administer and bring them into a new era of trust and integrity. These enhancements are encouraging more firms to participate and contribute valuable liquidity to the benchmark-setting process," said Finbarr Hutcheson, president, ICE Benchmark Administration, in the statement.

Source: Platts

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