CENTRAL CLEARING FOR THE IBA Gold AUCTION

Central clearing for the IBA Gold Auction removes the need for firms to have large bilateral credit lines in place with each other in order to become a Direct Participant (DP). This opens up the auction to a broader cross section of the market and also facilitates greater volume in the auction.

Central clearing  for the auction is enabled by effecting  Exchange for Physical (“EFP”) transactions into the new physically settled, loco London gold daily futures contract which is traded on ICE Futures U.S. The EFPs establish positions in the futures contract which are cleared and can be physically delivered at ICE Clear U.S.

Central clearing for the gold auction

  • • DPs must establish a clearing account with an ICE Clear U.S. Clearing member
  • • DPs may still maintain credit lines to settle bilaterally against other DPs
  • • DPs can elect, for each counterparty, to clear or settle their auction transactions bilaterally

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About the IBA Gold Auction

ICE Benchmark Administration (IBA) is the administrator for the LBMA Gold Price and operates the IBA Gold Auction which underlies the LBMA Gold Price.

IBA operates physically settled, electronic spot gold auctions twice a day at 10:30am and 3:00pm UK time providing a market-based platform for buyers and sellers to trade physical spot gold. The final auction price is published to the market as the LBMA Gold Price benchmark which is widely used across the globe by participants such as producers, consumers, investors and central banks.

The price formation for the gold auction is in US Dollars and the auction settles against US Dollars only.

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Gold Daily Futures - Summary Contract Spec

Description

A physically settled daily futures contract for gold delivered loco London in unallocated vault accounts

Contract Symbol

AUD

Contract Size

100 fine troy ounces

Price Quotation

US Dollars and cents per fine troy ounce

Eligible Contract Dates

London Business Days on which commercial banks are generally open for business in New York

Minimum Price Movement

On and after trade date May 22, 2017: one cent ($0.0100) per fine troy ounce ($1.00 per contract), except that Block and EFRP trades may be executed at $0.0001 per fine troy ounce ($0.01 per contract). Prior to that trade date, the Minimum Price Movement is $0.0100 for all trade types.

Settlement

Physical Delivery

Delivery Points

Vaults in London operated by an LPMCL member which provides vaulting services for gold

Grade/Standards/Quality

Gold meeting the specification standards published by the LBMA for gold bars that are acceptable in settlement of unallocated loco London gold transactions, as revised from time to time.

Last Trading Day

The London Business Day prior to the Contract Date; trading in the expiring Contract Date ends at noon London time on LTD

Clearing Venue

ICE Clear US

Trading Hours

8:00 pm to 6:00 pm EST

Non-Screen Trade Types

EFP, EFS and Block Trades permitted

Block Trade Minimum Quantity

On and after trade date May 22, 2017: 5 lots. Prior to that date the Block Trade Minimum is 25 lots.

Exchange and Clearing Fees

Screen, EFP and Crossing Order Trades: $1.00 per side, Block Trades: $1.10 per side