London Bullion Market Association
The LBMA, or London Bullion Market Association, offers "over-the-counter" (OTC) wholesale trading of gold and silver bullion between members. The LBMA operates the worlds largest OTC gold market, trading an average of $13.9 billion worth of bullion (equivalent to 18.3 million ounces, or 52,875 Good Delivery bars) each day. Because of its importance to the global bullion trade, the LBMA oversees spot dealing in gold and silver for most of the world.
Gold traded by members of the London Bullion Market Association rarely, if ever, physically leave the vaults in which they are stored. The LBMA relies on paper transfers to denote gold trades, with physical bullion remaining in situ.
The LBMA is also responsible for formulating and administering the Good Delivery standard, used to regulate the characteristics of bullion traded within their market. The LBMA also operates the LBMA Good Delivery List, a register of refineries who have been shown to produce gold bullion bars to the required Good Delivery standard. Using these regulations, the LBMA ensures that all gold bought and sold via their trade association is of a uniform purity and value.
Formed in 1987 to formalise the existing Gold Fixing marketplace in London, the LBMA is loosely overseen by The Bank of England and governed by the Financial Services Act 1986. Trading within the LBMA is restricted to its 120 members, most of whom tend to be major international banks or established bullion dealers. All members of the LBMA must be active in the gold trade.