The London Bullion Market Association (LMBA) has whittled down the shortlist for its request for proposal (RfP) to three parties – these are two exchanges and one fintech company, FastMarkets understands.
The bidders involved, however, are still in the dark over who has been selected and frustration has been growing about the pace at which the LMBA is moving forward.
The LBMA – the international trade association that represents the wholesale over-the-counter market for gold and silver – late last year issued an RfP seeking ideas for the improvement of the London market.
It had submitted a request for information (RfI) asking for ideas for how the trade group can deliver an appropriate degree of transparency, attract greater liquidity through technology and increase efficiency and lower costs for institutions doing business.
From the 20 parties that responded to the RfI, the LMBA was believed to have shortlisted five parties – the LME, CME Group, Intercontinental Exchange (ICE), Autilla/LSE and Markit/ABS – to submit their suggested reforms.
Market participants are still divided over who the three bidders are or should be but most now believe ICE will be the chosen provider. ICE also won the race to administer the London gold fix in November 2014.
A clearing platform or an exchange are among the routes chosen to increase liquidity in the London gold market, which is primarily over-the-counter (OTC), with trades taking place privately between counterparties rather than on an exchange.
The LBMA is expected to announce the preferred single provider at its annual conference in Singapore in October this year. The decision was initially expected in the second quarter of this year.
Meanwhile, the LME and the World Gold Council, with support from five banks and one proprietary trading house, announced last month plans to launch new spot, futures and options contracts for gold and silver in the first half of 2017.
(Editing by Mark Shaw)