Section 5: Periodic and Ad Hoc Reviews of Members

5.1 Periodic Reviews

LBMA reviews every Member periodically. This includes, but is not limited to, a review of the Member’s compliance with these Rules and its continuing business practice. In addition, LBMA may request the Member to obtain a renewed letter of attestation from its original three attesters. If one or more of the original attesters is no longer a Member, a new attester must be provided.

5.2 Ad Hoc Reviews and Incident Review Process

Where routine Due Diligence checks or market intelligence raise concerns about a Member, LBMA may carry out an ad hoc review of the Member at any time. Such a review will be subject to the procedure outlined under the Incident Review Process and may be instigated under various circumstances, including but not limited to adverse media coverage, or any allegation or evidence of a potential breach of the Applicable Laws.

LBMA follows the Incident Review Process in response to any incident or escalation. Further information on the process can be found on the LBMA website. LBMA will seek corroboration wherever possible; however, due to the sensitivities involved, LBMA may keep the details of an individual review confidential until the issue has been resolved.

Led by the LBMA General Counsel, the process is designed to ensure a thorough and fair review of the Member’s activities. Given that the process involves numerous stakeholders to verify the information, it is difficult to conclude an average lifespan of each incident reviewed under the IRP. However, it must be understood as an iterative process, particularly in situations where new information is produced, or a situation escalates.

Any final outcome of the IRP process will be subject to a quality control check, by a subgroup of the LBMA Board, who will also determine the final decision. This subgroup comprises the independent Non-Executive Directors, the Chief Executive and the Executive Directors of the LBMA Board. The decision by this group will be final.

5.3 Provision of Information

Subject to the Applicable Laws, LBMA reserves the right to ask for information related to a periodic or ad hoc review. This information will be handled confidentially. Information requested can include but is not limited to:
a) Annual audited accounts (including balance sheet, profit and loss account, and cash flow statement) within four months of the end of its financial year, together with those of its ultimate parent company (if any);
b) Further information in relation to relevant commercial matters;
c) Further information in relation to regulatory and compliance matters;
d) Further information to confirm compliance with the Code and/or Applicable Laws;
e) Details of systems, controls and procedures attested by the Member’s board of directors and/or a reasoned legal opinion from a reputable law firm that such relevant systems, controls and procedures are appropriate to address any applicable legal or regulatory requirements.

Failure to provide requested information may prevent clarification, which could potentially result in a negative result.

5.4 On-Site Inspection

The Chief Executive, and those empowered by him/her, shall be entitled to attend at the premises of any Member for the purpose of inspecting any of the information referred to above and the Member must ensure that all cooperation is afforded.

5.5 Government/Regulatory Enquiry

The Chief Executive, and those empowered by him/her, may cooperate with any governmental or regulatory or enforcement organisations in such manner as they deem fit, without giving notice to the membership. However, LBMA is not obliged to share any trade data that is reported under section 7.3.