The London daily silver fixing process will cease to be operated by the current company, The London Silver Market Fixing Limited, as of August 14, it said in a statement Wednesday.
The statement said that until August 14, "Deutsche Bank, HSBC and The Bank of Nova Scotia will remain members of the company and the company will administer the London Silver Fixing and continue to liaise with the FCA and other stakeholders."
The London gold and silver fixing processes have been under the spotlight for a number of months.
Deutsche Bank said in January that it would withdraw from the London gold and silver fixing processes as part of the scaling back of its commodities business. It subsequently confirmed this at the end of last month, although still without giving a time frame.
"The period to August 14, 2014 will provide an opportunity for market-led adjustment with consultation between clients and market participants [regarding the silver fix]," the statement issued Wednesday said.
It added that, "the London Bullion Market Association has expressed its willingness to assist with discussions among market participants with a view to exploring whether the market wishes to develop an alternative to the London Silver Fixing," the release concluded.
Ruth Crowell, the LBMA chief executive, said in a seperate statement to the market: "As part of our role as the trade association for the London bullion market, the LBMA has launched a consultation in order to ensure the best way forward for a London silver daily price mechanism.
"The LBMA will work with market participants, regulators and potential administrators to ensure the London silver market continues to serve efficiently the needs of market users around the world. As part of the consultation process, the LBMA will be actively approaching market participants requesting feedback."
In reaction a trade source told Platts that "silver producers and consumers will have to switch to an alternative benchmark price, some contracts may have to be amended. But the market is not sure a) what that replacement would be or b) whether there will be a standard industry wide replacement for the fix."
They added that it raised debate about whether the London gold fixing process would survive the current regulatory scrutiny intact and posed questions for the LBMA.
Silver fixed in London on Wednesday at $19.87/oz from a Tuesday fix of $19.44/oz.
The London Silver Market Fixing Limited declined to comment on matters relating to the fixing processes.
