London gold fix company seeks third party to run benchmark

* New administrator, chairperson sought for gold fix

* Gold fixing company launches request for proposals

* New process put in place for silver fix last week (Releads, adds background, detail)

By Jan Harvey and Clara Denina

LONDON, July 16 (Reuters) - London Gold Market Fixing Ltd, the company operating the century-old global price benchmark known as the "fix", said it is seeking a third party to take over administration of the process, possibly signalling a move to an electronic platform.

The company, working on behalf of gold fixing banks Barclays , HSBC, Societe Generale (Paris: FR0000130809 - news) , and Bank of Nova Scotia, said it had launched a request for proposal (RFP) process with a view to appointing a new administrator for the benchmark, supported by the London Bullion Market Association (LBMA).

"It is sensible to say that based on the feedback received for the silver alternative, the reformed gold system will also be electronic, auditable and transaction-based," an LBMA spokesman said.

A similar process to find a new price benchmark recently took place in the silver market. That yielded an electronic auction mechanism to replace a daily conference call with just three banks.

The gold fix, along with other financial benchmarks, has been under increasing regulatory glare in the wake of the Libor rate-rigging scandal. Detractors have criticised the process as being vulnerable to manipulation.

Changes to the current gold "fix", a twice-daily auction between four banks that takes place over the telephone, will include a new code of conduct for participants and the appointment of an independent chairperson, the statement said.

It confirmed information from a source familiar with the matter earlier on Wednesday.

"There has been a call for a certain amount of third-party engagement and oversight ... the industry wants that to be done in a transparent way," the source said.

CME Group (Kuala Lumpur: 7018.KL - news) and Thomson Reuters were last week named as the new operators of the electronic silver benchmark that will also include an increased number of participants, in a move that was widely seen preceding sweeping reforms of precious metals price-setting.

The LBMA acted as a facilitator in the process to find new governance for the silver market and a source close to the matter said it would now be open to consider administering the gold benchmark itself.

"The LBMA did a very good job in the way in which they looked at the methodology (for) silver," Jonathan Spall of G Cubed Metals Ltd, which conducted an independent review for the LBMA as part of the selection process, told the Reuters Global Gold Forum on Wednesday.

"The market was engaged throughout the process ... If the gold market decides to go a similar route then it is a pretty good plan to follow. I believe it has legitimacy by having such widespread involvement."

The scrutiny by regulators across Europe and the United States on financial benchmarking processes started at individual banks after the Libor manipulation case in 2012, for which firms have been fined billions of dollars.

Appearing before the UK Treasury Select Committee earlier this month, David Bailey, head of markets infrastructure and policy at the Financial Conduct Authority, said collusion among banks in setting the gold price benchmark was possible but there is no evidence of this.

And although market participants view many aspects of the existing gold process favourably, reforms still need to comply with the 19 principles on financial benchmarks outlined in July 2013 by the International Organization of Securities Commissions (IOSCO), an umbrella body of market regulators.

The first phase of the IOSCO principles, which all benchmarks should follow, ends in July.

IOSCO has six months to decide if any further action is appropriate, based on the take-up of the benchmark administrators to these principles, a source close to the regulator said. (Reporting by Jan Harvey and Clara Denina, editing by David Evans and Veronica Brown)