Congo’s South Kivu governor suspends mining operations in province
The decision will hit artisanal miners of metals such as gold and tin hard, as they are the region's dominant producers.
London Bullion Market Association.
The four banks that currently operate the near century-old London Gold Fix aim to have the new benchmark operational by year-end as they ready to begin soliciting proposals for a new administrator to run a revamped price setting process.
According to the banks that own the London Gold Market Fixing Ltd., which manages the procedure, and the London Bullion Market Association, they will open a market consultation in late August. The plan is to announce a third-party administrator by the end of September, they said.
The process will be open and not restricted to firms who pitched to run a mechanism that will replace the silver fixing on Aug. 15.
Currently the Bank of Nova Scotia, HSBC, Societe Generale, and Barclays calculate the fix 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.
The industry has been pushing for a change as of late. Members of the World Gold Council met in London last week to discuss the issue, but did not reach an agreement.
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.
The London Gold Market Fixing Ltd was founded in 1994 but only since 2011 have organizations wishing to reproduce or utilize gold fixing data been required to purchase a licence from the company.
