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Factbox - The exchanges battling for London's $5-trillion gold market

LONDON (Reuters) - Three of the world's biggest exchanges are launching precious metals contracts in London this year, each aiming for a chunk of the city's $5-trillion (4 trillion pound)-a-year gold business.

The London Metal Exchange (LME) , CME (CME.O) and ICE (ICE.N) see an opportunity as increasing regulatory scrutiny is raising costs for banks trading gold over the counter (OTC) in bilateral deals. Regulators are pushing for a more transparent, centrally-cleared model that exchanges offer.

The LME plans a much wider range of contracts than its competitors currently offer. But success is not guaranteed for any of the new contracts as banks may decide to keep their OTC business and the flexibility it provides.

"You won't have three winners," said the head of one brokerage.

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Following are details of the contracts:

LONDON METAL EXCHANGE (LME)

Name: LMEprecious

Launch date: June 5

Contract type: daily physically deliverable in London futures out to 25 days, monthly out to 24 months, quarterly out to five years.

Lot size: 100 troy ounces for gold, 5,000 troy ounces for silver.

Electronic trading 19 hours a day, phone trading 24 hours a day.

Key features:

-- Mix of daily, monthly and quarterly contracts replicates the OTC market, allowing users to manage physical inventory and hedge any date out to five years, which would enable the creation of a forward pricing curve for gold and silver.

-- Backed by banks Goldman Sachs (GS.N), ICBC Standard Bank , Morgan Stanley (MS.N), Natixis (CNAT.PA) and Societe Generale (SOGN.PA), along with proprietary trader OSTC and the World Gold Council, an industry body.

-- The banks are estimated to account for up to 50 percent of London's gold trade. They have committed to supply liquidity in return for half of revenues from the contracts.

-- Brokers fear the contracts will be too costly and inflexible.

Links:

https://www.lme.com/metals/precious-metals/gold/

https://www.lme.com/metals/precious-metals/silver/

INTERCONTINENTAL EXCHANGE (ICE Futures U.S.)

Name: Gold Daily Futures

Launch date: Jan. 30

Contract type: daily futures physically deliverable in London.

Lot size: 100 troy ounces

Trading 22 hours a day plus 30 minutes pre-open.

Key features:

-- The contracts have not traded since launch, according to trading data on its website.

-- From March the contracts will be used to provide central clearing to the participants of the LBMA gold price auction, which is managed by ICE.

-- The auction sets a global gold benchmark price twice a day and has 13 direct participants including many of London's largest gold trading banks.

-- Clearing in the United States allows ICE to use simpler U.S. regulation but means European firms would have to route their trades through a U.S.-based middleman.

Link:

https://www.theice.com/products/62026758/Gold-Daily-Futures/specs

CME

Name: London Spot Futures

Launch date: Jan 9

Contract type: daily futures physically deliverable in London and listed for one day.

Lot size: 100 troy ounces, 5,000 troy ounces for silver.

Trading 23 hours a day.

Key features:

-- Link London's bullion market to CME's already established and liquid COMEX gold futures in New York.

-- The contracts have not traded since launch.

-- Clearing in the United States allows the exchange to use simpler U.S. regulation but means European firms would have to route their trades through a U.S.-based middleman.

Links:

http://www.cmegroup.com/trading/metals/precious/london-spot-gold_contract_specifications.html

http://www.cmegroup.com/trading/metals/precious/london-spot-silver_contract_specifications.html

(Reporting by Peter Hobson; Editing by Pratima Desai and David Stamp)