Morgan Stanley joins LBMA silver price benchmarking process

Morgan Stanley will join the electronic auction process to set the benchmark price of silver from October 25, CME said in a statement today.

Morgan Stanley will be the seventh participant joining China Construction Bank, HSBC Bank USA NA, JPMorgan Chase Bank, The Bank of Nova Scotia, The Toronto Dominion Bank and UBS AG.

CME and Thomson Reuters won the battle to provide the methodology and price platform for the daily process in July 2014, replacing the 117-year old fix in August that year under sweeping reforms of the entire precious metals complex.

The decision to end the 117-year old benchmark or ‘fix’ was prompted by Deutsche Bank’s resignation from London Silver Market Fixing Ltd, leaving just HSBC and the Bank of Nova Scotia. A two-party fix was not a viable or sustainable option, all of the parties involved agreed.

The LBMA silver benchmark came under criticism late in January after the LBMA Silver Price was set 84 cents below the spot and futures price.

The ‘fix’ or ‘benchmark’, as it is now known, is still the global benchmark reference price used by central banks, miners, refiners, jewellers and the surrounding financial industry to settle silver-based contracts.

While some traders continue to use the 24-hourly traded spot price, larger players prefer the snapshot-style daily benchmark to settle bulkier contracts on a traditionally over-the-counter (OTC) market.

(Editing by xx)

The post Morgan Stanley joins LBMA silver price benchmarking process appeared first on The Bullion Desk.

from The Bullion Desk http://ift.tt/2dtzNtv
via IFTTT