The LBMA is the international trade association that represents the market for gold and silver bullion, which is centred in London but has a global client base, including the majority of the central banks that hold gold, private sector investors, mining companies, producers, refiners and fabricators. The current membership stands at 143 companies which are either actively involved in the loco London bullion market or which provide services to the market, such as supervising or assaying.
The LBMA was formally incorporated in 1987 at the behest of the Bank of England, which was the bullion market's regulator at that time, to take over the roles previously played by two separate organisations, the London Gold Market and London Silver Market, whose origins go back to the mid-nineteenth century.
Since the passage of the Financial Services and Markets Act 2000, spot and forward trading in bullion in the UK have not been regulated activities. As a result of the passage of the Financial Markets Act 2012 regulation of the UK financial markets has been significantly changed. The Prudential Regulation Authority ("PRA") at the Bank of England is now responsible for prudential banking regulation of most of the financial firms that are active in the bullion market. The PRA works closely with the Financial Conduct Authority (FCA) which is responsible for consumer and competition issues. Trading in spot, forwards and wholesale deposits in the bullion market is underpinned by the Non-Investment Products (NIPs) Code, which has been drawn up by participants in the UK foreign exchange, money and bullion markets. The Code can be downloaded from the Bank of England's website.
The LBMA's membership encompasses banks, dealers, fabricators, refiners, shippers and brokers that are actively involved in the London bullion market. There are two categories of full membership: Market- Making and Ordinary. Although originally open only to UK-based companies, full membership can now be granted to companies in other countries as long as they have a branch or subsidiary in the UK. In January 2000, the Association widened its membership by introducing an Associate category, which allows companies that have strong ties to the London market to become part of the LBMA. The Association's 75 Full Members and 68 Associates are located in 21 countries.
The ongoing work of the Association encompasses many areas, among them refining standards, trading documentation and the fostering of good trading practices.
In the refining industry, the LBMA Good Delivery List is widely recognized as representing the de facto standard for the quality of gold and silver bars, in large part thanks to the stringent criteria that an applicant must satisfy before being accredited. In 2004 the LBMA introduced a system of regular proactive monitoring of refiners on the List, an important initiative which further enhanced the reputation of the List and the refiners on it. The List is used by many precious metals exchanges around the world to define in whole, or in part, the refiners whose gold and silver bars are accepted in their own markets.
The LBMA and the London Platinum and Palladium Market (LPPM) have produced a a joint publication, A Guide to the London Precious Metals Market which describes the products that are available in the London precious metals markets and how these can be used by market participants. This can be downloaded by clicking here. Printed copies can be obtained upon request from the LBMA Executive.
The LBMA’s annual Precious Metals Conference has since 2000 been the premier professional forum for the world’s precious metals market. Following the conference in Hong Kong, China, in November 2012, the next event in the series will take place in Rome during the period 29 September to 1st October 2013.
The Alchemist, the LBMA's quarterly journal, contains articles of general interest to all participants in, and observer's of the bullion market. It is available free of charge from the LBMA Executive.