Preparing to establish a gold trading floor, initially only operating domestically

The State Bank is completing a project to establish a centralized gold trading floor to make the market transparent, unblock gold sources among the people and strengthen state management.

In October, the project will be presented for establishment.

The State Bank of Vietnam (SBV) is urgently drafting a project to establish a Vietnamese gold trading floor, expected to be submitted to the Government in October.

At the seminar "Establishing a gold trading floor in Vietnam" held on the afternoon of October 15, Deputy Governor of the State Bank of Vietnam Pham Tien Dung said that the research and consideration of establishing a gold trading floor aims to perfect the institution, develop market infrastructure, unblock gold sources among the people, make trading activities transparent, and at the same time strengthen the state's management role in the gold market.

According to Mr. Dung, the gold trading floor not only helps limit the situation of “off-line” transactions, but also provides transparent data for analysis, forecasting and policy making. When connected and processed promptly, data from the floor will become an important additional information channel for management agencies.

At the seminar, opinions from representatives of management agencies, businesses, banks, associations... all agreed on the contents, such as establishing and putting into operation a centralized gold trading floor, organized and managed uniformly; first of all, a physical gold trading floor, researching a roadmap for trading non-physical gold.

Furthermore, the gold trading floor gradually contributes to stabilizing the market, creating confidence for people to put gold into circulation and convert it into investment in production, business, and economic development.

Mr. Dao Xuan Tuan, Director of the Foreign Exchange Management Department (SBV), added that initially, this is a physical trading floor, a distribution channel for imported raw gold that meets standards, ensuring publicity and transparency. After stable operation, it is possible to deploy more gold account and derivative products, but the roadmap depends on the market.

Deputy Governor of the State Bank of Vietnam Pham Tien Dung speaks at the seminar.

8 steps to operate a gold trading floor

Before proposing the model of establishing a physical trading floor, the State Bank also considered the option of establishing a trading floor that allows gold trading on a commodity exchange; or establishing a gold trading floor in the International Financial Center in Vietnam.

All plans aim to form a modern gold trading center with full infrastructure and technology such as payment centers, storage warehouses... to gradually mobilize gold resources from the people.

The operation of the gold exchange is expected to go through the following 8 operational steps:

License to operate: Granting license to provide gold trading floor services; Granting license or designating and selecting participating commercial banks.

Register for trading: Eligible organizations and individuals register for an account to conduct transactions on the exchange.

Account Margin: Deposit money or gold as margin before placing a buy or sell order.

Place a transaction order: Place a gold buy/sell order; The system notifies the order matching result.

Physical gold delivery: Deliver gold after order matching.

Payment: Complete payment between parties according to the order matching value.

Reporting and information storage: Record, store, and report transaction data.

Inspection and examination: State management agencies conduct periodic and unscheduled supervision and inspection.

The pilot implementation of a gold trading floor in Vietnam will go through 3 phases, with the roadmap flexibly adjusted according to the actual situation and implementation results.

Specifically, phase 1 deals with imported raw gold. Phase 2 deals with imported raw gold and gold bars. Phase 3 expands to imported raw gold, gold bars, types of gold in circulation in the country, gold certificates and gold derivatives.

During the pilot period, international connectivity has not been implemented, meaning that the Vietnamese gold exchange only operates domestically.

Regarding participating members, phase 1 includes: Organization providing gold trading floor services; Payment banks; Trading members. Phase 2 and phase 3 are expected to expand the number of members.

The centralized gold depository and inspection system has not been implemented in phase 1. The State Bank will coordinate with relevant ministries and branches to research and implement it in the next phases.

Source: https://vietnamnet.vn/chuan-bi-thanh-lap-san-giao-dich-vang-ban-dau-chi-hoat-dong-trong-noi-dia-2453051.html