Participants in new silver fix ‘unclear’ three days before it goes live

Participants in new silver fix ‘unclear’ three days before it goes live

With only three trading days left until the new electronic, auction-based and auditable substitute for the 117-year old silver fix goes live there is still no certainty over who will take part on Friday.

According to FT.com (subs. required), the first users of the new price setting process should be the 11 market-making members of the London Bullion Market Association, which include Credit Suisse, JPMorgan, Goldman Sachs and UBS.

None of them, however, has publicly stepped forward to say they will be involved in the Chicago Mercantile Exchange/Thomson Reuters-run price setting method.

Dan Rees, head of strategy for commodities at Thomson Reuters, said last month that, to facilitate a smooth transition, there would be no major alterations to the way things are for a six-month period. After that point, however, a fee to access the data is likely to be instated.

The old silver fix was effectively killed off in April, after Deutsche Bank withdrew from the process as part of a wider retrenchment of its commodities business. This left only two banks on the fixing panel — Bank of Nova Scotia and HSBC Holdings—rendering the process unviable, according to people familiar with the matter.

The LBMA-led search for an alternative came as market regulators had been scrutinizing benchmarks across the financial sector in the wake of a scandal involving rigging of interest rates.