* Deadline for proposals set for October
* LBMA to hold seminar to present shortlisted proposals
* Search for new chairperson scrapped
By Clara Denina
LONDON, Sept 18 (Reuters) - At least 15 companies have expressed interest in replacing the century-old London gold benchmark, with a new system seen in place by the end of 2014 as banks effectively call time on the current process, two sources familiar with the matter said.
Representatives from a handful of banks have been running the gold “fix” since 1919. The twice-daily price they agree is used by producers, consumers and investors to trade the metal and value their holdings.
The London Bullion Market Association (LBMA) and the four banks currently administering the price-setting mechanism by conferring in London by telephone had said earlier this month that their choice for a new operator would be announced in October, but the process is likely to take longer.
Bank of Nova Scotia, HSBC, Societe Generale and Barclays currently set the benchmark. Deutsche Bank withdrew in May after two decades.
The LBMA launched a consultation with market participants this month, including central banks and miners, to assess how they want prices to be derived. It will hold a seminar in October for shortlisted proposals.
One change that banks were looking to make, mostly to comply with new regulations, was the appointment of an independent chairperson to supervise the current fix.
But that search has since been scrapped, as the market has started leaning towards an electronic solution that would not require it, one of the sources said.
In a shift driven by increased regulatory scrutiny after scandals over manipulation of benchmark prices in other financial markets, a similar process to find a new administrator took place in the silver market earlier this year.
That search yielded an electronic auction mechanism run by the Chicago Mercantile Exchange (CME) jointly with Thomson Reuters.
CME was the first to confirm its interest in bidding to operate the gold process in July.
The London Metal Exchange, data provider Platts, part of McGraw Hill Group, and bullion broker Autilla also said their dialogue with the bullion market was ongoing, but declined to comment on whether they had submitted a formal request.
A third source said U.S. derivatives bourse Intercontinental Exchange was likely to have put in a proposal. The exchange declined to comment.
These companies had all bid to replace the 117-year-old silver benchmark, alongside U.S. news agency Bloomberg and UK-based exchange-traded-funds provider ETF Securities. (Editing by Veronica Brown and Dale Hudson)