London gold fix company appoints committee to oversee benchmark

* Gold fix company to detail new code of conduct

* New administrator, chairperson sought for gold fix

* RFP process unlikely to be launched before new silver fixstarts

By Clara Denina

LONDON, July 25 (Reuters) - The company operating the goldprice 'fix' has appointed a supervisory committee to oversee thecentury-old system of benchmarking gold prices ahead of theimplementation of stricter regulations, its website showed onFriday.

The London Gold Market Fixing Ltd's new board is made up ofcompliance officers at the four banks that currently set thetwice-daily auction process over the telephone.

The appointment of the committee comes after the companysaid this month it was seeking a third party to take overadministration of the process.

Other changes, which will include a new code of conduct forparticipants and the appointment of an independent chairperson,are widely seen as the first steps toward a move to anelectronic platform which will broadcast it to a wider audience.

A similar process to find a new price benchmarkadministrator recently took place in the silver market. Thatyielded an electronic auction mechanism to replace a dailyconference call with just three banks.

The gold fixing company said it would launch a request forproposal (RFP) process to find the new administrator for thebenchmark. Two sources close to the matter said that this isunlikely to start before market participants see the new silverprocess get under way from August 15.

Bank of Nova Scotia, HSBC, SocieteGenerale, and Barclays operate the goldfixing, while Deutsche Bank stopped in May after twodecades.

The new committee will promote the implementation of a codeof conduct and will devise a process for reviewing the conductof the fixing by including post review of the recordings andscrutiny of the submission process, the company said on itswebsite.

It will also be responsible for assessing any potentialconflict of interest or complaints about the fixing process.

SCRUTINY INCREASES

Regulators across Europe and the United States havescrutinised financial benchmarking processes following the Libormanipulation case in 2012 and firms have been fined billions ofdollars.

Although market participants view many aspects of theexisting gold process favourably, reforms still need to complywith the 19 principles on financial benchmarks outlined in July2013 by the International Organization of Securities Commissions(IOSCO), an umbrella group of market regulators.

The first phase of the IOSCO principles, which allbenchmarks should follow, ends in July.

IOSCO has six months to decide if any further action isappropriate, based on the take-up of the benchmarkadministrators to these principles, the regulator said.

The new committee will recommend reviews of the gold fixingprocess to make sure it is compliant with the IOSCO principles,it said.

The London Gold Market Fixing Ltd was founded in 1994 butonly since 2011 have organisations wishing to reproduce orutilise gold fixing data been required to purchase a licencefrom the company. (Editing by Susan Thomas and Jason Neely)