LMEprecious, the new suite of contracts to be run on the London Metal Exchange, are scheduled to launch Monday as planned, the exchange said Thursday, with all regulatory paperwork complete and signed off.
LMEprecious will introduce exchange-traded and centrally cleared precious metals products to the London market.
It will comprise spot, daily and monthly futures for gold and silver.
"The contracts were designed to support ongoing regulatory change, enabling greater market transparency and access, as well as providing additional robustness to the precious metals market," the LME said in partnership with the World Gold Council.
The LME, WGC and six partners -- Goldman Sachs, ICBC Standard Bank, Morgan Stanley, Natixis, OSTC and Societe Generale -- developed LMEprecious following extensive engagement with major market participants and users.
The LME has entered into contractual arrangements with the above entities such that "at any given time at least three of those entities will provide market making services, or price streaming, for gold and silver futures at agreed bid/ask spread and depth across the curve, for 80% of the time between 0800 and 1830 London time."
For the "spot" gold contract the obligation is for a total of at least 99 lots each side at a maximum of $0.90 bid/ask spread.
"This means there will be quotes down the curve providing liquidity to execute orders, roll positions and close out existing positions where required," the statement said.
In response to feedback from members, the LME has applied a discount to the Spot/T+3 carry fee to bring it in line with the Tom/Next carry fee.
Both will be charged at 0.01 cents, per leg per lot per side.
"We are pleased to confirm that all technical and administrative preparations are complete for the launch of LMEprecious next week," said Kate Eged, head of precious metals at the LME.
