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Regulation shakes up London Bullion Market Association

The London Bullion Market Association (LBMA) says it might start charging member banks more or even dissolving the Gold Forward Offered Rates (GOFO) – the rate at which dealers will lend gold against US dollars – due to new financial market regulations.

The Chairman of LBMA told Reuters reporters on Sunday that the new principles require the body to “look at how data is collected, how it’s recorded, who is administrating it.”

The push for regulation stems from the Libor (London Interbank Offered Rate) manipulation scandal in 2012. The International Organisation of Securities Commissions (IOSCO) has been looking at how to supervise market benchmark setters.

The Chairman told Reuters that if members decide that they “don’t need to spend more money on regulatory affairs […] then the GOFO might not exist.”

See also: INFOGRAPHIC: A step-by-step on what is the Libor scandal