LONDON — The five banks that settle every transaction in London’s $6.8 trillion (4.9 trillion pounds) a year gold market are changing the rules of their clearing house to make it easier for newcomers to join.
The reform is part of a broad overhaul of institutions that underpin the world’s largest bullion trading centre to make them more transparent after accusations of price manipulation by banks and traders and pressure from regulators.
As that pressure increased, the number of banks clearing gold transactions through a company they own called the London Precious Metals Clearing Limited (LPMCL) has dwindled from seven to five. They are HSBC, JPMorgan, Scotiabank, UBS, and ICBC Standard.
Several banks have attempted to join the group in recent years. ICBC Standard joined in 2016 after months of wrangling over conditions and an application from at least one other, Goldman Sachs, was declined, sources in LPMCL member banks said.
Spokespeople for HSBC, JPMorgan, Scotiabank, UBS and ICBC Standard declined to comment. A spokesman for Goldman Sachs declined to comment on whether its application had been turned down.
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