- LBMA Interface

- LBMA Data Warehouse and

- LBMA Data Vendor Services

It is intended that by establishing the above the following services will be launched later in 2016:

- Reporting

- Valuation curves

- Portfolio Reconciliation

- Portfolio Compression (via the LBMA-i)

The purpose of these new services is to address the immediate regulatory, cost and growth requirements of the market, which will connect via a technology interface called the LBMA-i.

Additionally, the LBMA intends for the new services to be able to support the introduction of future services (for example Trading Venue and OTC Clearing / CCP) subject to the appropriate market regulatory conditions and LBMA membership demand.

Number of participants

The issuing of the RfP follows a strong positive response in November to the Request for Information (RfI) with 20 entities submitting 17 responses. These entities included exchange groups, technology firms, brokers and data vendors. From these responses a short list of five service providers were selected to participate in the RfP process.

Timetable

Responses to the RfP are requested by mid-March 2016, with a decision on the chosen service provider(s) in Q2 2016 and a target delivery date of the new services in the second half of 2016.

Process

After reviewing written proposals the LBMA will compile a shortlist of service providers and those parties will be invited to present to the LBMA User Group; who will make a recommendation to the LBMA Management Committee. Presentations are expected to take place within two weeks of the closing date for the responses to the RfP. The decision will be formally made by the LBMA Management Committee (MC), who will be represented during each presentation.

Background

In 2015 the LBMA appointed EY to undertake a Strategy Review to determine a trading technology solution for the Loco London market, which met regulatory requirements and the LBMA’s strategic vision. This Strategy Review provided the LBMA with various recommendations to support further development of the market.

Specific regulatory concerns are impacting on the precious metals market, including Net Stable Funding Ratio (NSFR) as defined under BASEL III, which will, for example, make holding of physical bullion significantly more expensive. In parallel, the Fair and Effective Markets Review (FEMR) final report specified the need for post-trade reporting. Given the particular nature of the precious metals market and regulatory demands, increased transparency is required to support the case for a reduction in the NSFR. It is expected that the reporting requirement will help to address these issues and enhance transparency.