3.1. Overview

LBMA will admit to Membership an organisation which:

(a) Meets the criteria for Membership, as set out in section 4;
(b) Applies to LBMA using the application process, as detailed in section 4;
(c) Passes the necessary Due Diligence;
(d) Is approved for Membership by the ExCom

Applicants must make clear which category of Membership they are applying for. If approved, every Member then needs to make sure that the principles and obligations, under section 7, are followed with immediate effect.

3.2. Benefits

Schedule 3 highlights the benefits of becoming an LBMA Member. Changes to any of the benefits will be notified within a reasonable timeframe.

3.3 Membership Categories

LBMA Membership is divided into three categories:

a) Full Members: Full Membership of LBMA is available to companies located in any geographical location, not just the UK. All Members must be operational in areas that are closely related to the London Bullion Market, as the centre of global bullion over-the-counter (OTC) trading.
b) Market Making Members: Market Makers have the same rights as Full Members but also have the additional responsibility to quote bid and offer prices to each other, during the London business day, for agreed minimum quantities and tenors in both gold and silver.
c) Affiliate Members: Affiliate Membership of LBMA is available to a range of international market participants, service providers, technology providers, exchanges and intermediaries.

Membership of LBMA and all related rights are not transferable.

3.4 Reclassification

3.4.1 Changing Membership Category

A Member may change its Membership category or apply for a new category in respect of a new service. This change may only be made if the Member meets the requirements of the new category and approval is provided by the ExCom. The change or addition in category may be subject to an increase in the Membership Fee and would become payable in the year of application. The ExCom may, at its discretion, reclassify an Affiliate Member as a Full Member, and vice versa. The ExCom may also, at any time, at its discretion, reclassify a Market Making Member as a Full Member and vice versa. All decisions will be subject to prior consultation with the Membership Committee and other Sub-Committees, as appropriate.

The final outcome will be determined by ExCom, following such consultation. In the event that any Member wishes to challenge a decision made by the ExCom, it may do so by submitting a case in writing to the Sub-Board Group, within 7 days on being notified of the original decision. The case must set out the reasons for the challenge and provide suitable evidence to support the case. This will be considered by the Sub-Board Group who will review the process and may request further information before making a final ruling.

3.4.2 Market Making Members

In order to apply for classification as a Market Making Member, the entity must first have been accepted as a Full Member. The Full Member should apply in writing, stating for which product(s) it would like to apply for Market Making status. The ExCom may at any time in its absolute discretion reclassify a Market Making Member back to a Full Member. The Full Member needs to undergo a probationary period of approximately three months, during which time it must provide two-way price quotes to the current Market Making Members in the products it has specified as being able to do so.

At the end of the probationary period, the current Market Making Members are consulted for their recommendation in relation to the reclassification. If any current Market Making Members are not satisfied with the service provided by the applicant Full Member, they must provide the ExCom with such detail of the shortcomings as the ExCom reasonably requests. The ExCom will make the final decision.