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Gold exchanges face regulation
A working group set up by the State Bank of Viet Nam will draft a regulation providing for the operation of gold trading floors, in response to recent disputes between investors and gold exchange operators, announced State Bank governor Nguyen Van Giau.
Because the State Bank controls the foreign exchange market, the Ministry of Industry and Trade currently overseas trading in goods, and provincial and municipal departments of planning and investment grant licences for trading exchanges, there is also considerable regulatory overlap that needs to be eliminated.
There currently about ten gold exchanges licensed in Viet Nam. Viet Nam Gold Business Association vice chairman Huynh Trung Khanh said the need to standardise regulations of these businesses was urgent in light of a series of recent disputes involving these exchanges and triggering considerable losses for some investors.
The lack of a law or regulation governing these matters has made it difficult for these investors to bring legal action against gold exchange operators, Khanh said.
On December 9, for instance, an employee of the ACB gold exchange entered a customer’s trading order incorrectly on the exchange’s computerised system, allowing one investor to buy a teal of gold from another for the unbelievable price of VND17,000 (about US$1), rather than the going rate of VND17 million ($1,000).
The management of ACB exchange, however, shunned efforts at resolving the resulting dispute, and a small error ended up costing some investors hundreds of millions of dong.
In September, a similar error occured at the Wall Street gold exchange, where the fee to withdraw gold rose unexpectedly from VND40,000 to 500,000. Even if the cases go to court, the judges will lack the legal framework to settle them.
VNS
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