Financial Markets

We want to hear from you

Following an eventful year of market turbulence and dislocations, we are very keen to hear Members’ views on what the OTC market needs to remain accessible, transparent and functioning. Consider what’s within LBMA’s control and what isn’t. For issues outside our control, we can facilitate market discussion.

We fully support progressive innovation and, to support this, the LBMA User Group will re-form with a new structure. We’re listening and we want Members to share their insights as we all look to the future.

Tariff threats was a key market theme. In late July, a ruling from U.S. Customs reclassified certain gold bars under a tariff code, initially creating uncertainty across the market. LBMA engaged with Members, international counterparts and US authorities to seek clarification. The subsequent position confirmed that gold would not be subject to tariffs, providing much-needed clarity. On silver, LBMA has remained engaged with Members as the market navigates tariff uncertainty.

The London Gold Market Working Group (LGMWG) continued its focus on market resilience and risk mitigation. Workstreams addressed contingency planning for market distress events, US tariffs and the next version of the Global Precious Metals Code.

The comprehensive review of the Market Making framework was completed. Feedback from Market Makers confirmed that while the regime’s role has evolved in an era of electronic trading, it continues to hold reputational and strategic value for participants. The majority supported maintaining the existing framework with minor enhancements, while a minority advocated exploring a liquidity provider model that better aligns with modern trading structures. This topic and also a much broader deep dive on market accessibility and transparency will inform the Board’s strategic discussions in early 2026.

Gold as HQLA

The joint LBMA-WGC initiative to advance gold’s case for recognition as a Level 1 High-Quality Liquid Asset (HQLA) gathered further momentum this year, helped by the broad interest in gold. The focus has been on broadening regulatory understanding of gold’s performance during stress events and positioning it as a complementary – rather than competing – asset within existing liquidity frameworks. Discussions with stakeholders have centred on introducing the concept of a voluntary liquidity buffer, above the 100% LCR, within which gold could play a stabilising role. This could work by using an additional new floating limit, for banks that do not want their LCR to fall below 100%, consisting of a third HQLA such as gold – an asset that is neither cash nor bonds. This approach has been well received as a pragmatic means of increasing market resilience and collateral diversity.

Engagement with key central banks remained a core focus in 2025; meetings with central bank presidents and senior policymakers gave us additional insight and also signposted intelligence to drive future HQLA efforts.

Following the positive reception of the independent paper commissioned by the WGC and authored by Professor Dirk Baur, a subsequent paper co-authored by LBMA and WGC was published by SUERF in April.

Transparency and Data

Enhancing transparency of the Loco London OTC market remains a priority. Nasdaq is rolling out data upgrades for LBMA Trade Reporting, including the introduction of a new product identifier for Tomorrow/Next swaps and the requirement to link both legs of such transactions under a common ID. These enhancements, due to go live in early 2026, will improve transparency of traded volumes and strengthen the integrity of reported data, supporting future benchmark initiatives. We are also working with Nasdaq on making the data more user friendly in 2026.

Progress continued on the feasibility of a forward benchmark and LBMA is working closely with potential administrators, conducting due diligence and aligning legal requirements. Enhancements to trade data fields only strengthen the integrity of the dataset underpinning benchmark development.