Silver Fix Goes Electronic for First Time

By Dow Jones Business News, 
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Two banks and a metals trading house are providing data for the first-ever electronic fixing of the daily silver benchmark on Friday, the London Bullion Market Association said.

Bank of Nova Scotia and HSBC participated in the previous, telephone-based system that has ruled the silver market for the past 117 years. The newcomer is Japanese trading house Mitsui & Co. Precious Metals--a prominent player in the silver market.

The new price will be set electronically at noon London time on Friday.

Until now, the silver benchmark, known as the silver fix, has been set by a panel of three banks, which would meet on a daily, private conference call to establish a price for a range of users from mining companies to high-street jewelers and central banks.

That system is being replaced by an electronic benchmark--called the London Silver Price--run by a consortium of CME Group Inc. and Thomson Reuters Corp., in partnership with the LBMA, a trade group. The new auction-based electronic system will match buying and selling orders from accredited market participants to reach a benchmark price.

More participants, including banks, trading houses, refiners and producers, are expected to join the new system in the weeks ahead, said the LBMA.

"Given the strong market engagement in the live testing and accreditation process, the LBMA fully expects the list of price participants will grow over the coming weeks," it said.

Write to Ese Erheriene at ese.erheriene@wsj.com

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This article appears in: Commodities

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