The London Bullion Market Association (now known simply as LBMA ), established in 1987, is the international trade association representing the global Over The Counter (OTC) bullion market, and defines itself as "the global authority on precious metals". It has a membership of approximately 150 firms globally, including traders, refiners, producers, miners, fabricators, as well as those providing storage and secure carrier services.
53-479: LBMA's mission “is to add value to the global precious metals industry, by setting standards and developing market services, thereby ensuring the highest levels of integrity, transparency and trust.” LBMA drives governance and continuous improvement of the market, ensuring all market participants can operate with confidence. LBMA is the standard-setting organisation that defines how precious metals are refined as well as traded, demonstrating this through its management of
106-663: A biannual Financial Stability Report. The bank provides wholesale banking services to the UK Government (and to over a hundred overseas central banks). It manages the UK's Exchange Equalisation Account on behalf of HM Treasury and it maintains the government's Consolidated Fund account. It also manages the country's foreign exchange reserves and is custodian of the UK's (and others') gold reserves . The bank also offers 'liquidity support and other services to banks and other financial institutions'. Commercial banks customarily keep
159-864: A bullion vault in London as a result. In 1750 the Bank of England sought to standardise the quality of the gold bars being stored, and so established the London Good Delivery List, originally named the List of Acceptable Melters and Assayers. The List formally recognised those refineries who produced gold bars to a certain standard and could therefore be allowed to enter the London market. By 1850, five companies - N M Rothschild & Sons , Mocatta & Goldsmid , Pixley & Abell , Samuel Montagu & Co. and Sharps Wilkins had been established. The term London Gold Market refers to these five companies who formed to oversee
212-625: A close working relationship with the London Platinum & Palladium Market (LPPM) and there is cross-representation on the Management Committees or Boards of each organisation. The LBMA Board has an independent Chairman, as well as Non-Executive Directors, which ensure the independence of the governance of the LBMA. Additionally, there are also elected Market Directors who sit on the Board and ensure
265-451: A common set of principles to promote the integrity and effective functioning of the global market covering ethics, governance, compliance and risk management, information sharing and business conduct. All market participants involved in the global wholesale precious metals market are expected to act according to the principles of the Code. LBMA members were required to attest their conformance with
318-567: A privilege for employees. Previously, the bank had maintained private and commercial accounts for all sorts of customers, including individuals, small businesses and public organisations; but a change of policy following the First World War saw the bank increasingly withdraw from this type of business to focus more clearly on its central banking role. During the Nine Years' War , the Royal Navy
371-418: A sizeable proportion of their cash reserves on deposit at the Bank of England. These central bank reserves are used by the banks to settle payments with one another; (for this reason the Bank of England is sometimes called 'the bankers' bank'). In exceptional circumstances, the Bank may act as the lender of last resort by extending credit when no other institution will. As a regulator and central bank,
424-453: A statutory regulator . The bank's headquarters have been in London's main financial district, the City of London , since 1694, and on Threadneedle Street since 1734. It is sometimes known as "The Old Lady of Threadneedle Street", a name taken from a satirical cartoon by James Gillray in 1797. The road junction outside is known as Bank Junction . The bank, among other things, is custodian to
477-712: A three-year cycle to ensure that the high standards continue to be met. LBMA Good Delivery refiners produce 400-ounce gold bars or 1000 ounce silver bars (also known as ‘large’ or ‘market’ bars) that conform to the strict specifications described in the Good Delivery Rules . The Good Delivery Rules defines what is acceptable when it comes to the appearance and the shape of the bars themselves. LBMA's Responsible Sourcing Programme began back in 2011 in response to US legislation such as Dodd Frank (signed into law by President Obama on 21 July 2010) and legislation concerning conflict minerals. From its origin, it has always followed
530-474: A wide range of market participants, including a Biennial Dinner and an annual party. Good Delivery The Good Delivery specification is a set of rules issued by the London Bullion Market Association (LBMA) describing the physical characteristics of gold and silver bars used in settlement in the wholesale London bullion market . It also puts forth requirements for listing on
583-413: Is empowered to act in the event of a bank failure 'to protect the UK's vital financial services and financial stability'. Between 1715 and 1998, the Bank of England managed Government Stocks (which formed the bulk of the national debt ): the bank was responsible for issuing stocks to stockholders, paying dividends and maintaining a register of transfers; however in 1998, following the decision to grant
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#1732847616534636-443: Is held in London every two years, with the next event taking place on 17–20 March 2019. This event gathers together those working within the world of assaying and refining, attracting people from within the list of accredited Good Delivery refiners, and also without. LBMA also coordinates a rolling programme of committee meetings and working groups to oversee and assist its work. Social events are organised to facilitate networking for
689-734: Is missed the Governor is required to write an open letter to the Chancellor of the Exchequer explaining the situation and proposing remedies. Other than setting the base interest rate, the main tool at the bank's disposal in this regard is quantitative easing . The bank has a monopoly on the issue of banknotes in England and Wales and regulates the issuance of banknotes by commercial banks in Scotland and Northern Ireland. (Scottish and Northern Irish banks retain
742-643: Is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694 to act as the English Government 's banker and debt manager, and still one of the bankers for the Government of the United Kingdom , it is the world's eighth-oldest bank . The bank was privately owned by stockholders from its foundation in 1694 until it was nationalised in 1946 by
795-470: Is the maintenance and publication of the Good Delivery Lists for gold and silver. These lists comprise accredited gold and silver refineries that meet the stringent acceptance criteria. Listed refineries are eligible to produce and ship Good Delivery bars into London. These bars are used to underpin the global OTC gold and silver trades that are settled loco-London. The London Good Delivery standard
848-842: Is the vehicle by which trade reporting will be collated. It has been set up by Simplitium (formerly known as Boat Services Ltd) on behalf of LBMA. This was in response to the recommendations of the Fair and Effective Markets Review – which was led by the Bank of England and co-chaired by the Financial Conduct Authority and HM Treasury – for greater clarity in financial markets. It is mandatory for all LBMA members to participate in LBMA-i by reporting their transactions, and there are sanctions for those that do not comply. The primary responsibility for trade reporting remains with Simplitium to make sure that
901-429: Is universally acknowledged as the de facto international benchmark for the quality of large gold and silver bars. The List is also used (under licence) by many Futures Exchanges around the world to determine which bars are accepted in their own markets. LBMA manages the accreditation process for all Good Delivery listed refiners. This process involves an examination of the company's history and current relationship with
954-544: The Attlee ministry . In 1998 it became an independent public organisation, wholly owned by the Treasury Solicitor on behalf of the government, with a mandate to support the economic policies of the government of the day, but independence in maintaining price stability. In the 21st century the bank took on increased responsibility for maintaining and monitoring financial stability in the UK, and it increasingly functions as
1007-522: The London Gold Market ’s increasing number of participants. Its founding CEO was Chris Elston, formerly of the BoE and its founding Chairman was Robert Guy. LBMA has maintained the gold and also the silver Good Delivery Lists since 1987. Since then LBMA has expanded its focus, services and expertise to focus on the entire global wholesale precious metals market. LBMA has close ties to all stakeholders within
1060-633: The OECD five-step due diligence process as laid out in the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. LBMA's Responsible Gold Guidance (RGG) (Version 6) was the document first reviewed by the OECD in 2016. Following this, LBMA took the opportunity to clarify some of the language used and expand sections on sourcing responsibly for artisanal and small-scale mines when developing Version 7. This
1113-414: The bank rate ), which is decided by the bank's Monetary Policy Committee (MPC). (The MPC has devolved responsibility for managing monetary policy ; HM Treasury has reserve powers to give orders to the committee "if they are required in the public interest and by extreme economic circumstances", but Parliament must endorse such orders within 28 days.) As of 2024 the inflation target is 2%; if this target
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#17328476165341166-660: The fineness , weight, dimensions, appearance, marks, and production of gold and silver bars. It specifies procedures for weighing, packing, and delivery. It also describes policies for ensuring refiners' compliance with the specifications. The current edition of the Good Delivery Rules was published in January 2023. Weight is not recommended to be stamped on bars of either gold or silver, because bars will be officially weighed on delivery, and this weight, which may be different from that originally marked, will prevail. A bar's weight may also change by handling or sampling, thus invalidating
1219-546: The "Loco London" market. Members also include fabricators, brokers, refiners and shippers. A number of Members have been reclassified as Market Makers. Market Makers have the same rights as Full members but also have the additional responsibility to quote bid and offer prices to each other during the London business day, for agreed minimum quantities and tenors in both gold and silver. Market Makers must provide this service across one or more products, being Spot, Options and Forwards. There are thirteen LBMA Market Makers who provide
1272-532: The Bank of England has not offered consumer banking services for many years, but it still does manage some public-facing services (such as exchanging superseded bank notes). Until 2017, Bank staff were entitled to open current accounts directly with the Bank of England and were given the unique sort code of 10-00-00. Under the terms of the Banking Act 2009 the bank is the UK's Resolution Authority for any bank or building society judged ' too big to fail '; as such it
1325-604: The CEO and Board for approval. The Global Precious Metals Code, launched on 25 May 2017 (with some minor amendments made in April, 2018), sets out the standards and best practice expected from market participants in the global Over the Counter (OTC) wholesale precious metals market. The Code is intended to define a robust, fair, effective and transparent market where all participants are able to transact following best practice guidelines. It sets out
1378-441: The Code by signing a Statement of Commitment by 1 June 2018. On 6 February 2018, the Bank of England issued a Statement of Commitment to the Code. By doing so the Bank is demonstrating that it is committed to adhering to the principles of the Code when acting as a market participant within the market, and that its internal practices and processes are aligned with the principles of the Code. Central to LBMA's quality assurance work
1431-599: The Debt Management Office and custodian of its securities . Ever since its foundation in 1694, the bank had provided a retail banking service for the Government; however in 2008 it decided to withdraw from offering these services, which are now provided by a range of other financial institutions and managed by the Government Banking Service . Until 2016, the bank provided personal banking services as
1484-603: The English government to borrow the £1.5m that it wanted to use to expand the Royal Navy. In 1691, William Paterson had proposed establishing a national bank as a means of bolstering public finances. As he later wrote in his pamphlet A Brief Account of the Intended Bank of England (1694): "...it was proposed some years ago that a publick transferrable Fund of Interest should be established by Parliament, and made convenient for
1537-713: The LBMA Good Delivery List of approved refineries . Good Delivery bars are notable for their large size and high purity. They are the type normally used in the major international markets ( Hong Kong , London , New York , Sydney , Tokyo , and Zürich ) and in the gold reserves of governments, central banks , and the IMF . The entire Good Delivery specification is contained in the LBMA document titled The Good Delivery Rules for Gold and Silver Bars: Specifications for Good Delivery Bars and Application Procedures for Listing . The document includes specific requirements regarding
1590-524: The LBMA for Full Members versus Associates is that Associates do not have voting rights. Associates also have more limited options for sponsoring other applications. In the UK bullion market, Associates are not considered by HM Revenue and Customs as members of the market and hence cannot trade under the terms of the Terminal Markets Order. Refiners need to apply for GDL status before they can become an Associate. LBMA coordinates and strictly manages
1643-1099: The LBMA. Those listed companies that refuse to participate in regular monitoring are removed from the Good Delivery List and added to the Former List. Five companies are accredited by the LBMA as Good Delivery Referees in order to supervise the Good Delivery System and monitor the companies with Good Delivery certification. The referees' main functions are: The companies accredited as referees are: Bank of England King Charles III [REDACTED] William, Prince of Wales [REDACTED] Charles III ( King-in-Council ) [REDACTED] Starmer ministry ( L ) Keir Starmer ( L ) Angela Rayner ( L ) ( King-in-Parliament ) [REDACTED] Charles III [REDACTED] [REDACTED] [REDACTED] The Lord Reed The Lord Hodge Andrew Bailey Monetary Policy Committee The Bank of England
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1696-407: The UK's savers, investors and borrowers against threats to the financial system as a whole. Threats are detected by the bank's surveillance and market intelligence functions, and dealt with through financial and other operations (both at home and abroad). The majority of these safeguards were put in place in after the 2007–2008 financial crisis : In 2011 the bank's Prudential Regulation Authority
1749-448: The bank operational independence, responsibility for government debt management was transferred to a new Debt Management Office , which also took over Exchequer cash management and responsibility for issuing Treasury bills from the bank in 2000. Computershare took over as the registrar for UK Government bonds ( gilt-edged securities or 'gilts') from the bank at the end of 2004. The bank, however, continues to act as settlement agent for
1802-411: The global OTC market are conflict-free as well as compliant with international anti-money laundering laws . Vaulting Statistics were first published by LBMA in 2017. According to this data, amount of gold and silver physically held in London vaults is currently more than 7,700 tonnes of gold and 33,700 tonnes of silver. The gold alone is valued in excess of $ 330 billion, more than the reported value of
1855-477: The globally acknowledged London Good Delivery Lists and Responsible Sourcing programme, as well as the publication in 2017 of the Global Precious Metals Code alongside a requirement for all LBMA members to commit to its adherence. LBMA works with miners, investors, fabricators, ETFs , refiners, manufacturers, consumers, civil society and central banks from around the world. In addition to acting as
1908-470: The market is steering the development of the Association. Beyond that there are sub-committees and working groups, in which market participants can be engaged and steer the broad spectrum of work undertaken by the LBMA. The Brazilian gold rush in the 17th century, and the subsequent gold rushes of California, Australia and South Africa resulted in an influx of gold into the UK. The Bank of England established
1961-585: The market, including the London Platinum and Palladium Market , London Precious Metals Clearing Ltd, central banks and regulatory bodies. LBMA has four main types of Membership: Market-Making Member, Full Member, Affiliate Member, Exchange Affiliate Member and additionally, one Associate membership. Full Members are organisations which are actively involved in the London bullion market . For example, for entities that trade, this means trading gold or silver bullion or related derivatives such as forwards and options in
2014-457: The market, its financial standing, its sourcing and refining methods as well as its assaying techniques and abilities. Refiners are required to produce a set of sample bars as part of the process that are inspected for their quality and then independently assayed to ensure that the refiner meets the minimum specifications for consistency, specificity and accuracy in determining the bar's fineness. LBMA proactively monitors all accredited refiners on
2067-469: The membership application process. All applicants must nominate three Attesters to support their application. Attesters are selected from the existing membership, with the exact choice dependent upon the type of membership applied for and the applicant's industry type. Submitted applications are presented to the Membership Committee for consideration prior to its recommendations being put forward to
2120-571: The metal held in Fort Knox , Kentucky and second only to the entire holdings of the US Government. It is anticipated that the true size of the global over-the-counter market in gold, silver, platinum and palladium will be known in 2018. Not only will the actual volume be known for the first time, but the data collected will help form LBMA's dialogue with regulators on matters such as Net Stable Funding Ratio and other measures under Basel III . LBMA-i
2173-408: The official gold reserves of the United Kingdom (and those of around 30 other countries). As of April 2016 , the bank held around 5,134 tonnes (5,659 tons) of gold, worth £141 billion. These estimates suggest that the vault could hold as much as 3% of the 171,300 tonnes of gold mined throughout human history. According to its strapline , the bank's core purpose is 'promoting the good of
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2226-635: The only globally recognized benchmarks for precious metals. LBMA organises a variety of industry events featuring leading experts, including the Annual Precious Metals Conference, traditionally held at a different location each year. The 2023 conference will be held in Barcelona, while in previous years conferences have been held in Boston, Singapore, Vienna, Shanghai, Rome, Berlin, Hong Kong, Kyoto and Montreal. The Assaying and Refining Conference
2279-495: The operation of the gold market in London. In 1919, it set up the first Gold Price fix at Rothschild's offices. The London Gold Market was also responsible for Good Delivery accreditations and the maintenance of the Good Delivery List . LBMA was established in 1987 in recognition by the Bank of England of the need for an independent body to oversee the custody, maintenance and regulation of the Good Delivery List, separate from
2332-552: The original mark. Bars that do not comply with Good Delivery rules are termed Non–Good Delivery. If they are similar to Good Delivery bars but do not fully meet the requirements, they must be stamped with "NGD" to distinguish them from conforming bars. The LBMA maintains two Good Delivery Lists of approved refineries (one for gold and one for silver) that meet certain minimum criteria (age, net worth, and production volume) and have demonstrated their ability to produce Good Delivery bars. Listed companies agree to submit to monitoring by
2385-412: The people of the United Kingdom by maintaining monetary and financial stability'. This is achieved in a variety of ways: Stable prices and secure forms of payment are the two main criteria for monetary stability. Stable prices are maintained by seeking to ensure that price increases meet the Government's inflation target. The bank aims to meet this target by adjusting the base interest rate (known as
2438-512: The range of activities falling within the scope of our Responsible Sourcing Programme. Responsible Silver Guidance was launched in September 2017 and came into force on 1 January 2018. The Responsible Platinum & Palladium Guidance has also been developed and published recently. This framework, based on the OECD Due Diligence Guidance, gives assurance to investors and consumers that all London gold, silver, platinum and palladium stocks that underpin
2491-507: The right to issue their own banknotes, but they must be backed one-for-one with deposits at the bank, excepting a few million pounds representing the value of notes they had in circulation in 1845.) In addition the bank supervises other payment systems , acting as a settlement agent and operating Real-time gross settlement systems including CHAPS . In 2024 the bank was settling around £500 billion worth of payments between banks each day. Maintaining financial stability involves protecting
2544-594: The scope remains relevant, that all legal and regulatory requirements are met, and that information published does not impinge any confidentiality requirements. LBMA's wholly owned subsidiary, Precious Metals Prices Limited, owns the Intellectual Property Rights for the daily spot benchmark prices for gold, silver, platinum and palladium. The administration and calculation of the prices are managed by independent third parties across electronic auction platforms. LBMA Gold, Silver, Platinum and Palladium Prices are
2597-461: The service in one, two or all three products. The Associate category includes many different types of market participants. For instance Associates may be traders in other markets. If so, they must have bullion based relationships with LBMA Members. Alternatively, Associates may be companies whose activities are judged to be relevant to the London bullion market, such as inspection, assaying and consultancy. The main difference in terms of status within
2650-469: The voice of the global precious metals market, LBMA is the contact point for regulators, investors and clients. LBMA has always worked closely with London Precious Metals Clearing Limited (LPMCL), which organises and co-ordinates bullion clearing and vaulting in London for OTC transactions taking place around the world. In 2017 LBMA assumed responsibility for the administrative functions of the LPMCL. It also has
2703-532: Was defeated by the French Navy in the 1690 Battle of Beachy Head , causing consternation in the government of William III of England . The English government decided to rebuild the Royal Navy into a force that was capable of challenging the French on equal terms; however, their ability to do so was hampered both by a lack of available public funds and the government's low credit. This lack of credit made it impossible for
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#17328476165342756-536: Was established to regulate and supervise all major banks, building societies, credit unions, insurers and investment firms in the UK (' microprudential regulation '). The bank also has a statutory supervisory role in relation to financial market infrastructures. At the same time, the bank's Financial Policy Committee (FPC) was set up to identify and monitor risks in the financial system , and to take appropriate action where necessary (' macroprudential regulation '). The FPC publishes its findings (and actions taken) in
2809-593: Was published in September 2017 and came into force on 1 January 2018. The OECD Alignment Assessment Findings report states "Many of the core principles of the OECD Guidance were incorporated into the requirements of the RGG (v6). These have been further improved by the revisions introduced by RGG (v7) and the LBMA’s standards are now fully aligned with all the overarching due principles of the OECD Guidance.” LBMA continues to expand
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