(Adds details in paragraph 2, 10-11)
By Clara Denina
LONDON, July 9 (Reuters) - The London Metal Exchange andtechnology firm Autilla teamed up on Wednesday to launch alast-minute bid to run the new global silver price benchmark inthe closely fought contest to replace the 117-year old London"fix."
The Autilla/LME camp's proposal for an electronic systemwill likely challenge a joint proposal from exchange operatorCME Group Inc and Thomson Reuters Corp, who arealso in the final running, sources who were not competing in theprocess have told Reuters.
The London Bullion Market Association (LBMA), the industrybody coordinating the search for a new mechanism, said onWednesday the results of the high-profile process are likely bythe end of the week. It had been due earlier this week.
The winner will operate a new daily silver pricing benchmarkto replace London's century-old silver fix when it ends on Aug.14 as regulatory scrutiny of price-setting intensifies acrossmarkets.
The LBMA has been consulting with market participants sinceMay with the aim of producing a transparent electronicalternative to the conference call that complies with toughenedregulatory standards.
"Throughout the LBMA's process, the market has consistentlyindicated that Autilla's technology and the LME's compliance andprice discovery systems are market-leading," LME Chief ExecutiveGarry Jones said in a statement.
The LME and Autilla, run by former brokers and traders fromsome of the fixing banks, had originally presented separateproposals.
The exchange had said it would use its electronic platformLMESelect, which was already available to LBMA market-makerssuch as JPMorgan and Societe Generale.
Members of the association, which count gold and silverfixing banks and other large bullion-trading banks, discussedthe seven original proposals at a meeting on Friday, withoutreaching any decision.
After a months-long consultation involving marketparticipants across the industry, the bid from CME and ThomsonReuters Benchmark Services Ltd had been considered a strongcontender out of seven proposals, sources have told Reuters.
Thomson Reuters and the CME declined to comment.
Other bidders include U.S. derivatives exchangeIntercontinental Exchange (ICE), U.S. news agencyBloomberg, commodity price benchmark provider Platts, a unit ofMcGraw Hill Group ; and UK-based exchange-traded fundsprovider ETF Securities.
The banks involved in the current silver fixing process areDeutsche Bank, HSBC and Bank of NovaScotia-ScotiaMocatta.
The LME currently provides clearing of over-the-countersilver forward rates in conjunction with London clearing houseLCH.Clearnet, which are marked to market using the LBMA forwardcurve.
"The solution will be ready for testing from 14 July, withimplementation and roll-out to begin in early August," theexchange said.
An electronic solution to the silver fix could be applied toprice-setting for gold and platinum group metals as well,sources said.
The silver fix is set every day at noon by three banks via aconference call, working out a price at which their customersare willing to buy and sell the metal. (Additional reporting by Josephine Mason in New York; Editingby Veronica Brown, Jane Baird, Jonathan Leff and Jonathan Oatis)