CORRECTED-CME Group, Thomson Reuters to implement changes to silver benchmark in May

(In March 22 story, corrects paragraph 2 to "after each auction
round" from "after the auction has closed")
LONDON, March 22 (Reuters) - Thomson Reuters TRI.TO and
CME Group CME.O said on Tuesday they will implement new
measures on May 16 to develop the silver benchmark further.
These include a blind auction, where only prices and not
volumes are disclosed to participants until after each auction
round, the companies said in a statement.
The settlement tolerance will also be increased where
necessary to maintain the integrity of the auction, they said.
Initial changes to the auction were made at the end of
January after traders expressed concern about a lack of
flexibility, which could lead to huge gaps between spot prices
and the final settlement through the auction.
On Jan. 28, the LBMA silver benchmark settled more than 80
cents below the spot price.
The measures included the suspension of the price-setting
process if the administrators believe the integrity of the
auction or participants is threatened.
CME and Thomson Reuters act as benchmark administrator and
calculator respectively, while the intellectual property holder
is the London Bullion Market Association (LBMA).
The CME/TR benchmark replaced the 117-year-old silver fix in
2014, when a telephone auction carried out between banks was
discontinued in favour of an electronic auction process.
The benchmark is used by producers, consumers and investors
to trade and value the metal.
Sweeping reform triggered by a regulatory push for more
transparency after the Libor interest rate-rigging scandal broke
in 2012, saw banks stop acting as both data providers and market
makers.
Gold and silver were included in the list of seven
benchmarks that would be regulated by the FCA last year.
Thomson Reuters is the parent company of Reuters News.