The Financial Times published an article that outlines what the new silver benchmark — which is to be administered by Thomson Reuters and CME Group — will look like.
The article states:
Under the London Silver Price – as the new benchmark will be known – Thomson Reuters will handle the governance and administration. It will publish the volumes of silver bars traded daily and prices that are tested – something that does not currently happen – while maintaining the anonymity of buyers and sellers.
CME Group will provide the electronic price platform and the methodology. By maintaining the auction process that is used in the current fixing – the silver price is adjusted up or down depending on supply and demand from the member banks – it will ensure that market participants can still trade at the daily benchmark price. But instead of a chairman from one of the fixing banks determining the opening silver price, and subsequent adjustments, an algorithm will now fulfil that role.
‘It’s a good system, with good governance, that will be overseen by well-respected organisations,’ says Jon Spall, managing director of G Cubed Metals Ltd, a precious metals consultancy, who conducted an independent review of the silver benchmark selection.