Thomson Reuters to implement measures to enhance LBMA Silver Price Benchmark
International derivatives marketplace CME Group Inc (NASDAQ:CME) and leading provider of intelligent information for businesses and professionals Thomson Reuters Corp (NYSE:TRI) today announced the implementation of new measures to improve and further develop the LBMA Silver Price Benchmark. The enhancements stem from ongoing consultation with participants and approval of the independent Oversight Committee.
These new measures follow the implementation of a circuit breaker in January this year, with the mechanism aimed at further developing the LBMA Silver Price Benchmark and protecting its integrity. This enables the auction to be stopped, reset and restarted to address significant price movements during the auction, which are inconsistent with the underlying market.
The new measures include:
- Introducing a blind auction: The aggregate bid and offer volumes will not be disclosed during the auction round. Instead, at the end of each auction round, the aggregate buy and sell volumes will be publicly available.
- Sharing the imbalance in the auction: The Silver price is established when the auction is determined as balanced, i.e., at the end of a round, the total of buy and sell orders are within a predefined threshold. When the auction is complete, the amount required to balance the buy and sell orders will be shared equally among all registered participants of the auction.
- Increasing the predefined threshold: In exceptional circumstances, the calculation agent can increase the imbalance threshold during an auction, within an approved range, to establish the LBMA Silver Price and settle the auction.