ICE Introduces Central Clearing for the LBMA Gold Price

The move demonstrates the importance of the LBMA Gold Price as the world’s most important benchmark price for gold.

Intercontinental Exchange (NYSE:ICE), an operator of global exchanges and clearing houses and provider of data and listings services, has today announced the introduction of central clearing for the IBA Gold Auction which underlies the LBMA Gold Price and which is scheduled to go live in March 2017. The launch of a new London gold daily futures contract in February 2017 has also been announced, subject to regulatory review.

The contract will be for Loco London gold, which refers to gold bullion that is physically held in London.

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Finbarr Hutcheson, President, ICE Benchmark Administration commented, “We are pleased to introduce central clearing for the gold auction underlying the benchmark LBMA Gold Price. The number of participants in the LBMA Gold Price has grown from 4 to 13 since we launched last year and we continue to see strong demand from other firms, which we believe the introduction of central clearing will further support. This growth demonstrates the continued importance of the LBMA Gold Price and its international role as the world’s most trusted benchmark price for gold.”

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Central clearing will be enabled by a new physically settled, Loco London gold daily futures contract that will trade on ICE Futures US (IFUS). It is designed to complement the existing London market, being based on the LBMA Good Delivery Rules.

Central clearing during the auction will allow the number of diverse direct participants to continue to grow.

The ICE Gold Daily Future will be a physically settled daily contract, traded in one cent ($0.01) increments, which calls for delivery of one hundred fine troy ounces of unallocated Loco London gold of quality satisfying the LBMA Good Delivery Rules.

Ruth Crowell, Chief Executive of the LBMA added, “I am delighted to see that this important innovation is coming to LBMA Gold Price auction. Central clearing is something that we have hoped to see ever since we started transitioning the benchmarks in 2014. Central clearing during the auction will allow the number of diverse direct participants to continue to grow.”

Finance Magnates last reported on the exchange operator earlier this month after it announced that ICE Data Services had expanded coverage for its Best Execution service to include sovereign and corporate bonds in Europe, the Middle East and Africa (EMEA).

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