LONDON, Sept 4 (Reuters) - The operator of the London goldprice benchmark said on Thursday it formally started the processto find a new administrator for the century-old mechanism thatwill halt the telephone call that four institutions enter twicea day in favour of an electronic solution.
The London Gold Market Fixing Ltd (LGMFL), along with theLondon Bullion Market Association (LBMA), said in a statementthat the choice will be announced in October, and implementationwill be complete by the end of 2014.
The price-setting process, also known as the fix, has beenused by producers, consumers and investors to trade gold andvalue their shares since 1919.
A similar process to find a new price benchmarkadministrator recently took place in the silver market. Thatyielded an electronic auction mechanism that replaced a dailyconference call with three banks on Aug. 15.
As it happened for silver, the LBMA is again launching aconsultation among market participants, including central banks,miners and refiners, to assess how they would like the new pricemechanism to be derived.
The London platinum and palladium market also launched anRFPs process that is looking for a new administrator andappointed an independent chairman in August.
Regulators across Europe, the United States and Asia havescrutinised financial benchmarking processes following the Libormanipulation case in 2012.
The Chicago Mercantile Exchange (CME), which won the contestto administer the silver benchmark, jointly with ThomsonReuters, was the first to confirm its interest in bidding tooperate the gold process too.
But the search for the new gold administrator will not berestricted to the companies that bid to replace the silverbenchmark, which included the London Metal Exchange (LME) andU.S. derivatives exchange Intercontinental Exchange among others.
Bank of Nova Scotia, HSBC, SocieteGenerale, and Barclays, making up the LGMFL, operate the gold fixing. Deutsche Bank withdrew inMay after two decades. (Reporting by Clara Denina; Editing by Marguerita Choy)