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The London Metal Exchange will start a new electronic procedure next week that can viewed online. The twice-a-day system replaces one that’s been in place since 1989 where BASF Metals Ltd., Goldman Sachs Group Inc., HSBC Holdings Plc and Standard Bank Plc discuss client orders and market demand to agree on a price.

The overhaul follows silver, the first precious metal to ditch the century-old daily fixing procedure in August. The gold fix will also be replaced early next year. Scrutiny has increased on how benchmarks are set, and a jeweler sued the four platinum and palladium fixing members in New York this week over claims they conspired to manipulate prices.

“There were few complaints about the previous mechanism,” said Jonathan Spall, managing director of consultant G Cubed Metals Ltd. and an independent chairman for the platinum and palladium fixings. “As we’ve seen with the benchmarks in many markets, the requirement is for structures that promote transparency, allow for wider participation and accountability as well as having a full audit trail.”

The London Bullion Market Association said today it will take ownership of price data and intellectual property of the new platinum and palladium prices. They’ll be called the LBMA Platinum Price and the LBMA Palladium Price and will still be run by the LME.

New Mechanism

The existing fixing members will participate in the new mechanism set to start on Dec. 1, the LME said. Prices will be published on the LME’s website.

Platinum was fixed at $1,214 an ounce this morning and prices for immediate delivery are down 11 percent this year. Palladium was fixed at $804 an ounce and has climbed 12 percent in 2014. Both metals are mainly used in catalytic converters that curb harmful emissions from vehicles.

Modern Settings LLC, a jeweler that buys metals, filed a complaint in Manhattan federal court on Nov. 25 claiming the four platinum and palladium fixing members used inside information about client purchases and sale orders to profit from price movements for eight years. There have been similar lawsuits filed connected to gold and silver fixings.

Mining companies to consumers use the platinum and palladium price-setting procedures that take place each day at 9:45 a.m. and 2 p.m. in London to trade and value metals. The fixings started in 1989 after expansion of so-called quotations, forerunners of the benchmarks.

Metal Fixings

During fixings, members declare how much metal they want to buy or sell for clients as well as their own accounts. Traders relay shifts in supply and demand to clients and take fresh orders as the spot price changes, before the fix is made. Participants can trade the metal and its derivatives on the over-the-counter market and exchanges during the calls.

The 137-year-old LME, acquired by Hong Kong Exchanges & Clearing Ltd. for $2.2 billion in 2012, will operate the new procedure through its LMEbullion platform. The bourse handled $14.6 trillion of contracts last year and accounts for more than 80 percent of industrial-metals futures trading.

Intercontinental Exchange Inc.’s ICE Benchmark Administration will run an electronic replacement for the gold fixing from early next year. CME Group Inc. and Thomson Reuters Corp. began running the new electronic, auction-based silver system on Aug. 15.

Bloomberg LP, the parent company of Bloomberg News, competes with Thomson Reuters in selling financial and legal information, and trading systems.

“The silver mechanism seems to now be working well,” said David Govett, head of precious metals at brokerage Marex Spectron in London. “The key to these working is to have more liquidity providers. If the platinum and palladium mechanism follows the same pattern then it should work just fine.”