A handful of investment firms and the London Metal Exchange (LME) are teaming up to launch a suite of exchange-traded and centrally cleared precious metals products.
The LME, along with Goldman Sachs Group Inc., ICBC Standard Bank PLC, Morgan Stanley Inc., Natixis SA, OSTC Group, Société Générale SA and the World Gold Council, are planning to launch a set of products to be known as LMEprecious in the first half of 2017.
Initially, LMEprecious products will include spot, daily and monthly futures, options and calendar spread contracts for gold and silver. The firms also intend to develop platinum and palladium contracts.
“The initiative has been driven by the need for greater market transparency, to support and aid ongoing regulatory change, provide additional robustness to the precious metals market, broaden market access, make trading more capital efficient and trade lifecycle management easier,” the firms said in announcing their plans.
The banks participating in the initiative will act as liquidity providers for the contracts to ensure efficient price discovery and establish market depth. All trading will be centrally cleared on LME Clear.
“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,” says Garry Jones, the LME’s CEO, in a statement.
“This is another important step in the modernization 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,” adds Aram Shishmanian, CEO of the World Gold Council, in a statement.