Some banks will start testing a new bullion-trading platform next week as part of the London Bullion Market Association’s push to make the city’s over-the-counter market more modern and transparent.
Several banks will be asked to input mock trades into the platform built by Autilla Inc. which will then feed into a new trade data repository developed by Boat Services Ltd., Autilla Chief Executive Officer Mike Greenacre said. Testing may take up to four weeks and the platform may start around late March.
The two London-based startups last year won a contract with the LBMA to help improve how precious metals are traded in London, where about $5 trillion of gold changes hands annually. The OTC market has come under increased scrutiny from regulators pushing for tighter commodity-trading controls, while also facing competition from new products listed by exchanges.
“Autilla is the connection system many of the banks will use to feed into the trade-reporting platform,” Greenacre said by phone on Friday. “The main challenge will be getting it to connect with individual banks’ systems.”
All of the LBMA’s trading members will be required to use Boat’s reporting system, known as LBMA-i. Using Autilla’s trading platform will be optional, but all transactions on it will be reported directly to the trade repository.
LBMA-i will be ready to start collecting data in the second quarter, Ruth Crowell, chief executive of the LBMA, said in an e-mailed statement. The data will then be vetted before being published later in the year, she said.
Market-making members of the LBMA include JPMorgan Chase and Co., HSBC Holdings Plc and ICBC Standard Bank Plc.