Status: Commodities

Fund on basis of silver in London Silver Fix
The members of the London Silver Fix (Deutsche Bank, HSBC Midland and ScotiaMocatta), chaired by ScotiaMocatta - the bullion and base metals operations of The Bank of Nova Scotia - announced today that effective June 1st, 1998, there will be procedural changes instituted to the operations of the Fix.

These will be the first substantive changes to procedures since the establishment of the London Silver Fix in the 1890s. As of June 1st, all orders will be conducted by telephone and customers will be allowed to change their order up until the time the price is agreed upon by the Fixing Members. The current session does not allow for any order changes once the Fixing is under way.

"This change will improve the transparency and the efficiency of the London Silver Fix and reinforces London's role as the premier bullion market in the world," said Timothy Jones, Global Head of ScotiaMocatta's bullion operations.

"In addition, the change will bring the procedures in line with those of the Gold Fix which also allows for order changes up until the time the price is Fixed."

The Chair of the Fix sets the Fixing price at a level where there is equality between the quantity offered for sale and the quantity required for purchase. At present, the London Silver Fix also agrees to a price for three, six and 12 months forward silver. The change in procedures will make it impractical to publish London Silver Fix forward prices. Customers, however, may now negotiate forward transactions with their broker on the Fix in a similar manner to the London Gold Fixing.

Spot prices in US dollars and pounds sterling will be the only prices published. The first London Silver Fix occurred in the 1890s in order to establish an orderly market for the purchase and sale of silver in London. At the time, the price of silver was about 30d an ounce (about 12.5 pence).

The London Silver Fix has operated for over 100 years as a benchmark mechanism for price setting and continues to be the world's reference price for spot silver.