The World Gold Council and the London Metal Exchange (LME), together with a group of banks and trading firms are planning to launch a suite of exchange-traded and centrally-cleared precious metals products.
They will jointly start a new venture called LMEprecious, which will introduce centrally-cleared gold and silver contracts in the first half of next year.
Other banks participating in this initiative are: Goldman Sachs, ICBC Standard Bank, Morgan Stanley, Natixis, OSTC and Societe Generale. They will act as liquidity providers for the precious contracts.
Goldman Sachs, ICBC Standard Bank, Morgan Stanley, Natixis, OSTC and Societe Generale will co-own the LMEprecious platform and will act as liquidity providers.
The new contracts will include contracts for spot, daily and monthly futures, options and calendar spread contracts, the companies said in a joint statement.
It will include platinum and palladium contracts later, the statement added.
All trading will be centrally cleared on LME Clear, the LME’s real-time clearing house, and leverage the London market’s existing delivery infrastructure.
Aram Shishmanian, CEO of the World Gold Council, said: “This is another important step in the modernisation of the gold market. It will strengthen London’s position in the global gold market, enabling it to meet the needs of all participants, attract new players and satisfy the highest standards of regulatory compliance.
”We are proud to have been the catalyst for this process, defining the new trading capabilities and driving market engagement. We are confident that the new offering will be successfully implemented and supported by the market.”
LME chief executive Garry Jones said: “We are delighted to be working with the World Gold Council and a group of leading banks, to now take this project forward towards an enhanced market structure. LMEprecious opens up trading opportunities for existing LME members and their clients, as well as for new participants wishing to take advantage of optimised precious metals trading.”