2.1 Purpose and Scope

The role of LBMA includes helping to ensure that the market operates against a fair and effective framework, and it therefore plays a fundamental role in setting standards and providing for quality assurance.

For LBMA to effectively carry out its obligations, these Rules for Members (Rules) have been established as a requirement that all Members must meet on application and at all times throughout their Membership.

The Rulebook details the different Membership categories, the application process and the ongoing reviews of all Members. Section 7 provides the principles and obligations that must be followed by all Member organisations. Section 8 explains the process and requirements for joining the LBMA Board and any of the LBMA Committees. Section 9 focuses on the enforcement process and how LBMA takes a decision if there is a breach of any of the Rules.

2.2 Application, Implementation and Changes

The Rules shall be binding on all Members of LBMA and will come into force on the date of publication on the LBMA website and as notified to Members 2.2 Application, Implementation and Changes. No Rule shall be inconsistent with, or shall affect or repeal anything contained in, the Articles. If there is a conflict between the terms of the Articles and any Rules established, the terms of the Articles shall prevail.

The Board has delegated its powers in respect of the Membership Rulebook and Membership processes, under the Articles, to the ExCom. The Rules are set and implemented by the ExCom, as delegated by the Board. The ExCom may issue a Notice that contains an administrative procedure (Notice) for implementing the Rules or any part thereof and shall have the same force as the Rules. Where a Rule has been amended, a Notice shall be sent to the appropriate category of Member to which it applies and the Rule will be updated in this Rulebook. For the purpose of these Rules, both Rules and Notices shall be referred to as Rules collectively.

In exceptional circumstances, the ExCom may grant to a Member a waiver of particular requirements of the Rules in such circumstances and subject to such conditions that the ExCom deems fit. Such waivers may be provided by the ExCom if it is satisfied that:
a) Compliance with the relevant requirements would be impossible for the Member;
b) The waiver would not create unacceptable risks for the market generally or any other Member; and
c) The waiver would not result in unreasonable or inequitable discrimination between Members.

Waivers granted by the ExCom shall be notified at the subsequent meeting of the Board. LBMA reserves the right to make changes to the Rules at any time. Any changes will be communicated in a timely way and all Members will be provided with reasonable notice to implement and comply with the changes. Failure to comply with any of the Rules, decisions of the Board or direction of the ExCom made pursuant to the Rules shall constitute a breach of the LBMA Rules for Members 8 Rules and may lead to potential disciplinary action, up to and including termination of Membership in accordance with the Articles.

2.3 Applicable Laws

Members must be aware of, and comply with, the laws, rules and regulations applicable to them and the precious metals market in each jurisdiction in which they do business (Applicable Laws). The Rules do not represent the judgement of, nor are they intended to bind the discretion of any regulator, supervisor or other official sector entities with responsibility over the relevant markets or Members, and they do not provide a legal defence to a violation of Applicable Laws.

All Members are responsible for adopting their own internal policies and procedures designed to comply with Applicable Laws. In the event of a conflict between the Applicable Laws and the Rules, the Applicable Laws will prevail.