London Bullion Market Association (LBMA)

History of the LBMA

The Bank of England established the LBMA in 1987 and in the process merged the London Gold Market and the London Silver Market both of which date back to the nineteenth century. In the first gold rush of 1697, gold was being shipped from Brazil into London in part under Royal Charter from Queen Elizabeth I. Such quantities were arriving that the Bank of England built a ‘bullion warehouse’ which then supplied the European markets. This warehouse supported the growth of stocks from Australian, South African and Californian mines.

In 1750 the Bank of England set up the Good Delivery List which recognised bars of certain specification suitable to be traded on the London market. The Good Delivery List is still in place today to maintain confidence in the wholesale market. By 1850, five companies - N M Rothschild & Sons, Mocatta & Goldsmid, Pixley & Abell, Samuel Montagu & Co. and Sharps Wilkins – between them established the ‘London Gold Market’ and set up the first gold price fix at Rothschild offices.

The 5 members remained unchanged until 1987 when the Bank of England decided an independent body was needed to maintain standards around the custody, maintenance and regulation of the Good Delivery List. This led to the founding of the London Bullion Market Association in 1987 through the merger of the London Gold Market and London Silver Market.

Roles & Functions of the LBMA

Regulation and Standard Setting: The LBMA sets the Good Delivery Benchmark for the quality of gold and silver bars through its Good Delivery List, ensuring they meet stringent purity and weight requirements. This not only standardises what qualifies as investment-grade bullion but also underpins the seamless functioning of global wholesale markets.

The LBMA Gold and Silver Prices: These prices are the internationally accepted benchmarks, crucial for pricing and trading decisions across various markets, from mining to central banks. The benchmark was originally known as ‘the fix,’ but the name changed apparently due to the interpretation that the prices were fixed and manipulated.

The Precious Metals Code: The Global Precious Metals Code of practice and conduct sets the standards and best practice principles for all members, and compliance to its charter is mandatory for membership. The code covers ethics, compliance, governance, and risk management, alongside guidelines for pre-trade, execution, and post-trade conduct, ensuring a comprehensive framework for professional and ethical market operations.

Networking and Education: Through conferences, seminars, publications and online content the LBMA seeks to bring together all participants of the global market and provide a range of educational resources to bring awareness to, and improve the operation of the precious metals market.

The Alchemist: issued on a monthly basis by the LBMA this magazine contains current affairs and news related to the precious metals market. You can find the Alchemist magazine range of educational issues, from 1995 to the present date.

The Significance of LBMA Membership

Trust and Credibility: LBMA membership is more than a symbolic badge; it signifies a dealer's commitment to the highest standards of ethics, quality and integrity. This ensures that each transaction is secure and reliable. The application process is rigorous, requiring attestation from 3 other established members and sets out to demonstrating a dealer's commitment to industry best practices.

Market Stability and Integrity: The LBMA and its members maintain a market environment that is transparent and ethical, helping to reduce the risk of fraud and market manipulation. This is particularly important for retail investors, who may not have the capability to perform in-depth due diligence and can lean into LBMA membership to add a degree of confidence and trust in their selected dealer.

Full Member Vs Affiliate Member: Chards are full members because we are active in Loco London and Loco Zurich on the wholesale market, which means we buy metal and use vaulting services in these locations. We are more active Loco Zurich and offer customers VAT-free silver and platinum coins and bars from bonded warehouse facilities. Metal bought in these locations also provide collateral to our allocated digital gold and silver products which are popular amongst our customers. A full member also has rights to put forward candidates for election to the board of Directors of the LBMA whereas affiliate do not, further demonstrating our commitment to the market.

Policy and Governance: All members have the right to put forward candidates to be considered for places on LBMA Sub-Committees and Working Groups. Chards will be looking to become active on working groups that impact the functioning of the retail market and help steer policy to encourage cost effective and safe investments for customers both in the public and corporate markets.

Why Choose an LBMA Member Dealer?

Quality Assurance: A dealer who has become a member of the LBMA has committed to a high degree of ethics, quality and stability. Customers can gain confidence knowing that LBMA members are also committed to a functioning market, develop systems to mitigate fraud and are ambassadors for high quality products from reputable global partners. This ensures customers get exactly what they paid for in a safe, efficient and reliable transaction.

Security and Peace of Mind: A member is demonstrating an ongoing commitment to the bullion market and therefore transactions, for physical products and associated vaulting services, can be executed with confidence and security. Customers therefore are provided peace of mind, which is invaluable in a market that is built on trust.

Compliance and Ethical Practices: Members must ethically source metals, following international standards that deter conflict financing and promote sustainability. This ethical commitment sets them apart from non-member dealers.

Expertise and Professionalism: LBMA members stay informed on current market developments and trends, providing insights that assist investors in making knowledgeable choices.

Making an Informed Choice: Why Trust Us

Our Commitment to LBMA Standards: Our values are aligned with the LBMA principles of transparency, quality and integrity. Our membership is testament to our dedication to the UK market since 1964, and our ongoing delivery of world class services and quality investment products.

How Are We Different: Choosing Chards as your precious metals dealer means partnering with a firm that places your investment's reliability, security and future liquidity as our top priority. Our LBMA membership, vast product catalogue and service offerings demonstrates commitment to transparent operations, ethical sourcing, and focus on our customers' needs from retail to institutional parties.