The World Gold Council, London Metal Exchange (LME) and key market participants are planning to introduce a suite of exchange-traded and centrally-cleared precious metals products.
This initiative will be joined by Goldman Sachs, ICBC Standard Bank, Morgan Stanley, Natixis, OSTC and Societe Generale, a release issued here said.
"This is another important step in the modernisation 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," WGC Chief Executive Aram Shishmanian said.
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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 life cycle management easier, the release stated.
LMEprecious will comprise spot, daily and monthly futures, options and calendar spread contracts for gold and silver.
Future developments will include platinum and palladium contracts.
The new product suite will complement the bilateral over-the-counter (OTC) market, offering market participants similar levels of execution flexibility, including the ability to bring bilaterally negotiated (phone-based) trades into clearing.
"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," LME Chief Executive Garry Jones said.
