A new silver price benchmark should be up and running next month as CME Group and Thomson Reuters have been tapped to operate a new pricing mechanism for the over-the-counter London Silver Price.

The London Bullion Markets Association (LMBA) announced Friday that the exchange firm, CME Group, and the financial data company, Thomson Reuters, have been selected to establish its new spot pricing mechanism after their proposal emerged as the consensus choice during a market consultation.

Under the proposal, CME Group will provide the price platform and methodology and Thomson Reuters will provide the administration and governance. The LBMA will also develop a process of accreditation for silver price participants.

That consultation process involved two market surveys, a seminar and numerous meetings with market participants, solution providers and regulators. The LMBA reports that the second survey indicated a clear market consensus for the proposal from CME Group and Thomson Reuters. This market consensus was also supported by an independent review.

The LMBA notes that the proposed pricing mechanism meets its criteria as it is electronic, auction-based and auditable. And, it is also tradeable with an increased number of direct participants, it adds. The group is planning to have the new mechanism available for testing in early August.

“We will work in partnership with the CME Group, Thomson Reuters and price participants to implement the solution in time for testing in early August and go live on the 15th [of] August,” said Ruth Crowell, chief executive of the LBMA.

William Knottenbelt, senior managing director, EMEA (Europe, Middle East, Africa) for CME Group said that the new electronic solution “will transform the London OTC silver spot price”.

“CME Group’s transparent, transaction-based OTC auction platform, combined with Thomson Reuters’ independent benchmark administration services will deliver a strong London footprint, a deep understanding of the silver markets, and a fully IOSCO-compliant, FCA-regulated solution to the London bullion marketplace,” he added.