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ICE Benchmark Administration To Oversee LBMA Silver Price

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(Kitco News) - The London Bullion Market Association announced Friday that ICE Benchmark Administration has been chosen as the new administrator for the benchmark LBMA silver price.

IBA, which already oversees the LBMA gold price, is expected to assume responsibility for the silver price this fall, the LBMA reported.

“Our centrally cleared model has already enabled broader participation and we continue to expand the gold auction,” said Finbarr Hutcheson, president of IBA. “We anticipate this will support expanded participation in silver as well. We are excited to build on our work with the LBMA to ensure strong governance and the evolution of these important benchmarks.”

Ruth Crowell, chief executive of the LBMA, said it was important for stability of the silver market for a new administrator to be seamlessly transitioned with minimal disruption.

“I believe these goals will be achieved with IBA as the new administrators, particularly since they bring with them the experience of successfully managing the LBMA gold price auction and other important benchmarks,” she said.

IBA will take over as administrator of the LBMA silver price from CME Group and Thomson Reuters. In March 2015, IBA transitioned the former London gold fix from a conference call-based methodology to an independently administered, transparent and electronic auction process which now underlies the LBMA gold price. The auction runs on ICE’s trading platform, which provides straight-through processing for many firms and a full audit trail for compliance departments, the LBMA said.

In April, IBA introduced central clearing to the LBMA gold-price auction, enabling a wider range of participants to join, the LBMA said. Since, over 4 million ounces of gold have cleared through ICE, the equivalent of nearly $5 billion. Volume that is cleared has increased from 30% at launch to 72% for the week ending July 7, the LBMA added.

IBA, which is an independently capitalized subsidiary of the Intercontinental Exchange, Inc., administers the following benchmarks: ICE LIBOR, the LBMA gold price and ICE swap rate and also the ISDA SIMM crowdsourcing facility.

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