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.
Functions
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 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 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 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.
Board and Committees
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 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.
History
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 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 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 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 the market, including the London Platinum and Palladium Market, London Precious Metals Clearing Ltd, central banks and regulatory bodies.
Membership
LBMA has four main types of Membership: Market-Making Member, Full Member, Affiliate Member, Exchange Affiliate Member and additionally, one Associate membership.