Over The Counter precious metals are traded in a wholesale market for professionals; hence, like the foreign exchange market, it is not directly regulated as a market, although the various products, firms and activities are subject to a number of regulations.

The major participants in the London market are, broadly speaking, authorised banks and investment firms, which are dual-regulated: most are supervised for prudential concerns by the UK’s Prudential Regulation Authority (part of the Bank of England) and, for conduct, consumer protection and competition purposes, by the UK’s Financial Conduct Authority (FCA).

The PRA and the FCA (and foreign supervisory bodies) work closely together, with the FCA generally taking the lead on UK market-wide issues, and both are represented on the UK’s Financial Stability Committee.

The LBMA does not have financial regulatory responsibilities for the OTC precious metal market, but obviously it maintains a close working relationship with the regulators.

Codes of Conduct

Trading in spot, forwards and wholesale deposits in the bullion market was, until recently, underpinned by the Non-Investment Products (NIPs) Code, which was drawn up by participants in the UK foreign exchange, money and bullion markets. Although the provisions under the NIPs code were intended only as guidance on what was believed to constitute good practice in these markets, in practice, the LBMA required all members to comply with it on a mandatory basis.

In 2015, the Bank of England, FCA and HM Treasury provided a number of recommendations under their Fair Effective Markets Review (FEMR). Under this Review, it was decided that the NIPs code would be replaced by a new global Foreign Exchange Code to be published by the Bank of International Settlements, and also that the Bullion annex of the NIPs code would be superseded by the Global Precious Metals Code, which was published by the LBMA on 25 May 2017.

Global Precious Metals Code

The Global Precious Metals Code covers all precious metals and, as with the NIPs Code, compliance with the Precious Metals Code is mandatory for all LBMA members.

The new Code sets out best practice in the precious metals market in a high level of detail and is therefore more comprehensive than the NIPs Code that it has replaced. In addition to market conventions, the Code covers principles that should be adopted by members, including compliance, governance, risk management, and pre and post trade execution. Illustrative examples of acceptable practices are included in the Code.

Printed copies of the Code are available, but the latest version is available on the LBMA’s website.

Global Precious Metals Code

The Global Precious Metals Code covers all precious metals and, as with the NIPs Code, compliance with the Precious Metals Code is mandatory for all LBMA members.

Responsible Sourcing Programme

The LBMA’s Responsible Sourcing Programme was set up to consolidate, strengthen, and formalise existing standards of refiners’ due diligence. The Responsible Gold Guidance (RGG) has been mandatory for all gold Good Delivery refiners since 2012, and the LBMA has recently expanded the scope of its responsible sourcing framework to include silver which becomes a mandatory requirement for all Silver GDL refiners from 1 January 2018.

Responsible Silver

To reinforce the LBMA’s commitment to responsible sourcing practices within the Good Delivery Lists, from 1 January 2018, compliance to the new LBMA Responsible Silver Guidance (RSG) becomes a mandatory requirement for all refiners wishing to sell into the London Bullion Market, and is intended to assure investors and consumers that all London silver stocks are responsibly sourced.

To minimise the additional resources required by refiners who produce both gold and silver GDL bars the silver guidance is aligned with the existing LBMA RGG facilitating the concept of multi-metal audits. The introduction of the new RSG aligns the requirements for both Gold and Silver GDL refiners adding a further layer of credibility to the GDL system.

LBMA Toolkit

Refiners should use the LBMA Toolkit (available on the LBMA website) to implement the requirements within this Guidance. Refiners may be asked to justify any substantive deviations from the Toolkit (comply or explain).


The Compliance Officer is responsible for the day to day running of the programme, when non-conformances arise these are escalated to the Audit Review Panel (ARP) for review and action. The ARP report to the Executive Committee (ExCom) on all matters relating to the management, governance and development of the Responsible Sourcing programme. The Physical Committee will be notified of the ARP action. The Regulatory Affairs Committee oversees the policy development and implementation of the Responsible Sourcing programme for example the complaints mechanism and incident handling procedure.

Continuous Improvement

The LBMA regularly reviews the content of its responsible sourcing guidelines to take into account emerging trends, new or amended regulation, ensuring they remain relevant, accurate and provide the correct level of protection to the Good Delivery System.

Annual Audit

It is mandatory for all refiners to use an auditor that has been approved by the LBMA. A list of Approved Service Providers is available on our website and updated on a regular basis.

Incident Review Process

The Incident Review Process is invoked in response to a particular stimulus of a reputational nature, information can come from a variety of sources (trade associations, law enforcement agencies, market intelligence etc.) and the LBMA will seek corroboration wherever possible as part of the process. Due to the sensitivities involved, the LBMA may keep the process confidential until the issue has been resolved. Refiners can raise concerns about the process directly with the LBMA, complaints must be made in writing and accompanied by supporting evidence, examples could be:

  • Conduct of an auditor
  • Disagreement over the outcome of an audit

The Compliance Officer will review the details of the complaint and the outcome will be formally communicated to all interested parties.

Whistleblowing Policy

Refiners should develop and publicise a mechanism allowing any employee or external stakeholder to anonymously voice concerns over the gold supply chain or any newly identified risk. Similarly people involved in the gold supply chain are encouraged to contact the LBMA with any legitimate concerns they may have over the gold supply chain, a refiners activities or any newly identified risk.

OECD Due Diligence Guidance and Implementation

The OECD Due Diligence Guidance is seeking to establish a global framework to help companies to manage their mineral supply chains. The objective is to enable companies, through due diligence, to put in risk-based processes that will enable continued sourcing of minerals from high risk locations if the appropriate processes and controls are in place.

The LBMA encourages refiners to go beyond the minimum requirements of due diligence and demonstrate “Best Practice” in sourcing responsibly.

The LBMA also encourages refiners to develop systems and processes that develop and enhance supply chain flexibility and adaptability.

LBMA Members as well as refiners have contributed to this work. Ruth Crowell, the LBMA’s Chief Executive also acted as the co-facilitator of the OECD Gold Supplement Drafting Committee and Vice-Chair of the OECD Multi-stakeholder Governance Group.

Responsible Sourcing Summary

The LBMA Guidance documents should be interpreted as a minimum threshold upon which Refiners should build and continually improve their due diligence practices across each of the key areas. The concept of continual improvement is an integral component of the LBMA responsible sourcing programmes and underpins the spirit of the LBMA’s five step framework.

The LBMA also supports initiatives facilitating responsible supply chains for all forms of mining in areas of conflict or human rights abuse high-risk.


This topic is dealt with extensively in section 11. However, since December 2014, the LBMA’s wholly owned subsidiary, Precious Metals Prices Ltd, has owned the daily spot price benchmarks for gold, silver, platinum and palladium. Prior to this, the LBMA had no formal role in the precious metals benchmarks as the administration and distribution was overseen by three separate Fixing Companies.

Platinum Group Metals

The principal-to-principal platinum and palladium market is not in itself FCA-regulated, although some of the participants may be regulated to the extent that they trade in platinum and/or palladium derivative products or they need to be FCA-regulated by virtue of other aspects of their business.

The open pit at AngloGold Ashanti’s Sunrise Dam operation in Western Australia