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LBMA takes stake in gold, platinum, palladium benchmarks

The London Bullion Market Association will take on intellectual property rights for gold, platinum and palladium price benchmarks when they are launched by new administrators, the industry body said on Friday.

London’s bullion price benchmarks, or fixes, were transformed this year as regulatory scrutiny and accusations of market manipulation made price-setting among a handful of banks untenable.

ICE Benchmark Administration was named as the new operator of what will become the LBMA Gold Price early next year after the previous precious metals benchmarks, known as the fixes, were wound down.

The Chicago Mercantile Exchange and Thomson Reuters were named as administrators of an auction-based silver price in August, while the London Metal Exchange will run the platinum and palladium fixes from December.

The LBMA said it will take a share of revenues from the price data, and will have power to replace the existing administrators if necessary.

The LBMA said it will take on intellectual property rights over the platinum and palladium benchmarks from Monday, and over the LBMA Gold Price from its expected launch in February next year.

“We will own the (platinum and palladium) data along with the LME, who are providing the platform. Revenues will be shared between the two companies,” a spokesman for the LBMA said.

“Once gold comes on stream, we will have four LBMA prices. ICE will provide the platform and do the administration, but the price will be the LBMA Gold Price.”

The arrangement also means that the LBMA will have control over who operates the four benchmarks in the future.

“We could, if we needed to, change the administrator,” the spokesman said.

Regulatory scrutiny of the gold, silver, platinum and palladium ‘fixes’, as well as other commodity benchmarks, increased in the wake of the Libor scandal in the foreign exchange market.

Switzerland’s financial watchdog said this month it had found a “clear attempt” to manipulate precious metals price benchmarks during a cross-market investigation into trading at Swiss bank UBS.

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