Delivering Transparency for the
Global OTC Precious Metals Market
LBMA-i has been delivered to meet LBMA’s requirement for a cost-effective service that improves transparency and demonstrates liquidity in the global OTC precious metals market.
Not only will the true size of the market be known for the first time but the data collected will help form LBMA’s dialogue with regulators on matters such as Basle III’s Net Stable Funding Ratio.
Managed by Simplitium, in partnership with Autilla, the service collates anonymous and aggregated Trade Reporting data from LBMA members in Loco London and Loco Zurich metal.
LBMA members are reporting their trading activity into the LBMA-i platform with a view to establishing a robust data set which will be published in the second half of 2018.
Fair and Effective Markets Review
The development of LBMA-i has its roots in the Fair and Effective Markets Review (FEMR), which was a comprehensive and forward-looking assessment of the way fixed income, currency and commodity (FICC) markets operate. It was led by the Bank of England, and co-chaired by the FCA and HM Treasury. The three organisations published the final report of the review, including findings and recommendations, on 10 June 2015.
Request for Proposal
Amongst the recommendations was a call for greater clarity in financial markets. While LBMA already published daily net clearing statistics for gold and silver, it acknowledged that since these flows are netted off that that it did not provide an accurate (or comprehensive) picture of the size of the global precious metals markets. Accordingly, LBMA issued a Request for Proposal (RfP) in 2016 to select a partner who could devise an appropriate mechanism to fully determine the size of the OTC traded market for gold, silver, platinum and palladium.
The issuing of the RfP followed a strong positive response to the Request for Information with 20 entities submitting 17 responses. These entities included exchange groups, technology firms, brokers and data vendors. From these responses a short list of five service providers were selected to participate in the RfP process. In October 2016, LBMA Board announced that Boat Services Ltd (now known as Simplitium), in a joint submission with Autilla, had been chosen to provide the interface for this project which is known as LBMA-i. It is mandatory for all LBMA members to participate in LBMA-i by reporting their transactions and there are sanctions for companies that do not comply.