LBMA
The London Bullion Market Association, or LBMA, is a wholesale OTC marketplace for the trading of gold and silver. Recognised as the global authority for precious metals, LBMA is the bullion market's predominant standard-setter. The association oversees every aspect of the over-the-counter (OTC) bullion trade; its key services include setting the standards for purity, provenance and form and establishing the ways in which gold and silver bars are traded.
The LBMA's 140 members come from over 30 countries and include major international banks, leading refineries and trusted precious metals dealers such as StoneX Bullion. Trading between London Bullion Market Association members is loosely monitored by the Bank of England and conducted according to recognised rules set out by the Good Delivery guide.
LBMA – from the beginning to the present day
The London Bullion Market Association was formed in 1987 by the Bank of England – at that time, the bank regulated the bullion industry. LBMA effectively took over the roles of two established entities, the London Gold Market and the London Silver Market, an organisation that can trace its origins back to the mid-1800s.
The LBMA monitors and sets refining standards and promotes good trading practices. The Association is comprised of key players in the London Bullion Market and counts leading mints and refineries, banks, traders, storage facilities, security carriers, and precious metal fabricators among its 140 members. It also produces several industry relevant publications such as The Alchemist, a quarterly journal of articles that appeal to interested amateurs and bystanders as well as participants in the bullion market. The Alchemist can be obtained free of charge from LBMA Executive.
In 2000, the LBMA hosted its inaugural Precious Metals Conference. The annual event is now the premier forum for professionals from all sectors of the precious metals industry. The 2018 LBMA Precious Metals Conference will be held in Boston from 28th to 30th October.
However, the London Bullion Market Association's main role is the development and publication of the gold and silver Good Delivery List, a table of regulations that sets the standards for bullion bars. In addition, the Good Delivery List states the requirements for inclusion on the LBMA's list of approved refineries.
The London Bullion Association – Good Delivery
To be universally acceptable, gold and silver bars must conform to certain specifications known as "Good Delivery specifications". Decided by the LBMA, these rules refer to the physical characteristics of gold and silver bars used as settlement in the wholesale bullion market.
Good Delivery bars are defined by their purity and large size and are commonly used in major international markets such as London, New York, Hong Kong, Tokyo, Zurich and Sydney. They're also the type found in the gold reserves of central banks, governments, and the IMF.
A Good Delivery gold bar weighs 400 troy ounces (12.5 kg) and must have a minimum fineness of .995/100. It should measure between 210-290 mm in length, be 55-85 mm wide on top and have a depth of 25-45 mm. To adhere to Good Delivery specifications, gold bars should be stamped with the refiner's hallmark, fineness, a serial number and year of manufacture.
The same identifying marks should be present on silver Good Delivery bars which weigh 1,000 troy ounces (31.1 kg). Silver bullion bars can measure from 250-350 mm in length, should have a top width of 110-150mm, and a depth of 60-100 mm. Interestingly, neither silver or gold Good Delivery bars are stamped with their weight. In wholesale bullion trading, precious metals are weighed upon delivery; weight can fluctuate very slightly through handling, so delivery weight always prevails.
The London Bullion Market Association aims to increase interest in and add value to the international precious metals industry. It continues to develop and improve market services and oversees quality by setting globally accepted standards that ensure transparency, fairness, and integrity.