London gold fixing firm seeks 3rd party to run benchmark
The four banks that set the daily London gold fix have begun a search for someone to take over the century-old process, the body that represents the gold-fixing institutions said Wednesday.
In a statement London Gold Market Fixing Ltd confirmed it is looking for a third party and it has begun a request for proposals (RFP) process to find it, with the support of the London Bullion Market Association.
It also said it is seeking to recruit an independent chairman for the board of the fixing company.
Currently the fix is calculated twice a day on telephone conferences at 10:30 a.m. and 3 p.m. London time. The calls usually last 10 minutes, though they can run more than an hour.
Firms declare how many bars of gold they want to buy or sell at the current spot price, based on orders from clients and themselves. The price is increased or reduced until the buy and sell amounts are within 50 bars, or about 620 kilograms, of each other, at which point the fix is set.
Financial benchmarks have come under strong scrutiny from regulators around Europe and the United States since 2012, when it became public that British banks had rigged the London Interbank Offered Rate (Libor).
In January Deutsche Bank announced its exit from the price-setting process, amid investigations by German regulators over suspected price manipulation.