London, 20 September 2011: Reuters

The chief executive of the London Bullion Market Association ( LBMA) has signed a contract with the NYSE Liffe regarding its use of the LBMA good delivery list, underscoring the growing popularity of precious metals investment. On the sidelines of the LBMA annual precious metals conference in Montreal, CEO Stewart Murray said he expects other exchanges, funds and exchange traded funds (ETFs) will sign contracts next year to pay for use of LBMA accreditation.

"We have encouraging responses from some of the institutions. By this time next year, I think you will see further development" similar to the NYSE Liffe deal, he said. Details of the NYSE Liffe deal were not disclosed.

The announcement reflects the growth of gold and silver ETFs and physical bullion investment in general, as investors seek a safe haven in precious metals.

Gold ETFs are backed by physical bullion, and most custodians are required to hold gold bars that meet the LBMA good delivery standard. The LBMA good delivery list is a widely recognizable industry standard for gold and silver bars, with the list made up of refiners which must meet stringent criteria for assaying standards and bar quality.

For example, a listed refiner must have a record of at least three years of producing a minimum 10 tonnes of gold or 30 tonnes of silver per year. "The idea is that the intellectual property of the delivery list is valuable, and exchanges using our list are paying something for supporting the work that we do," Murray said.

While the LBMA good delivery list is available to the public, Murray said an exchange licensed by the LBMA will get the most up-to-date information on LBMA-accredited refiners. With the good delivery list, an exchange can source refiners that meet the deliverable standard, while a fund's custodian is able to get physical gold bullion in a similar way, Murray said. NYSE Liffe, a unit of the NYSE Euronext , offers an exchange platform for derivatives.

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