LBMA Said to Invite LME, ICE to Propose Gold Trading Platform

  • CME also among firms asked to bid to create hub, people say
  • Decision on service provider to be made in second quarter

The London Metal Exchange and Intercontinental Exchange Inc. are among companies that have been invited by the London Bullion Market Association to submit proposals to develop a precious-metals trading platform in the city, according to two people familiar with the matter.

CME Group Inc. and a joint venture between Autilla Ltd. and the London Stock Exchange Group Plc have been invited to bid, said the people, who asked not to be identified because the matter is private. A partnership between Markit Ltd. and Allocated Bullion Solutions Pte Ltd. is also part of the group, they said. Bids are expected by mid-March and a service provider is likely to be selected in the second quarter, the LBMA said Thursday.

The LBMA is seeking to improve trading in London, where precious metals are dealt in the over-the-counter market, rather than on a bourse like the Comex in New York, as regulators push for more transparency and tighter controls. The association has said the best solution would be to make a hub where trades can be posted and stored in a database.

The LBMA, CME, the LME, ICE, Autilla, Markit, the LSE and ABS declined to comment.

Separately, the LME is in talks with five banks and the World Gold Council about starting gold contracts and standardized central clearing, two people familiar with the matter said last month.