Annex 2: Glossary of Terms

A Market Participant that transacts on behalf of and for the account of a Client.

The laws, rules and regulations applicable to the Market Participant and the Precious Metals Market in each jurisdiction in which the Market Participant does business.

An interest that a Market Participant might have to transact in a given product at a price that may be better than the prevailing market rate.

Includes LBMA Gold Price, LBMA Silver Price, LBMA Platinum Price, LBMA Palladium Price.

The methodology used to determine the Benchmark, for example, but not limited to, an auction.

Market Participants making requests, placing orders and subsequently executing trades through a dealer.

Information that is treated as confidential, including Precious Metals Trading Information and Designated Confidential Information:

• Precious Metals Trading Information. This can take various forms, including information relating to the past, present and future trading activity or positions of the Market Participant itself or of its Clients, as well as related information that is sensitive and is received or produced in the course of such activity. Examples include but are not limited to:
  • Details of a Market Participant’s order book;
  • Other Market Participants’ Axes;
  • Spread matrices provided by Market Participants to their Clients; and
  • Orders for and during the Benchmark Process.

Designated Confidential Information includes confidential, proprietary and other information for which Market Participants may agree to a higher standard of non-disclosure, which at their discretion, may be formalised in a written non-disclosure or similar confidentiality agreement.

The global set of principles for best practice in the wholesale Precious Metals Market.

Orders placed by a Participant into an LBMA Auction either directly as a direct Participant or indirectly via another direct Participant with the intention of managing the Participant’s risk inventory. Depending on the role of the Market Participant, the risk inventory may arise from prior or anticipated facilitation of client orders, or proprietary risk positions.

The spread or change that may be included in the final price of a transaction in order to compensate the Market Participant for a number of considerations, which might include risks taken, costs incurred and services rendered to a particular Client.

A view shared by Market Participants on the general state of and trends in the market.

A Market Participant that has been granted the status of Market Maker by LBMA.

A counterparty instructs a Market Participant to execute a Precious Metals transaction at the current available level. A Market Order is placed without any limit price, and the entire order is executed at a fair and transparent price and in a reasonable time frame.

A person or organisation (irrespective of its legal form) that is involved in the global OTC wholesale trading market for Precious Metals.

Where personnel deal for their personal or indirect benefit (e.g. for their immediate family members or other close parties).

In the context of this Code, this term refers to Gold, Silver, Platinum, and Palladium.

Can take various forms, including information relating to the past, present and future trading activity or positions of the Market Participant itself or its Clients, as well as related information that is sensitive and is received in the course of such activity.

The management of the risk associated with one or more anticipated Client orders, designed to benefit the Client in connection with such orders and any resulting transactions.

A Market Participant that transacts for its own account.

Responsible Sourcing requires Market Participants to have management systems and controls in place to address identified risks in the supply chain. This includes the LBMA Responsible Gold Guidance (RGG), based on the OECD Due Diligence Guidance, as well as the US and Swiss Know Your Client, Anti- Money Laundering and Combating Terrorist Financing regulations.

A contingent order, which triggers a buy or sell order for a specified notional amount when a reference price has reached or passed a predefined trigger level. There are different variants of Stop Loss Orders, depending on the execution relationship between counterparties, reference price, trigger and nature of the triggered order. A series of parameters are required to fully define a Stop Loss Order, including the reference price, order amount, time period and trigger, etc. Inappropriately trading to trigger or defend Stop Losses or option barriers is prohibited.