Banks banned from opening new gold trading floors

The State Bank of Vietnam (SBV) has asked banks that have gold trading centres to report about the operation of their gold trading floors and not to open new ones until the central bank has new regulations.

Banks will have to report to the SBV the names of their gold trading floors, the starting time of operation, the legal status, the mode of transaction, the operational procedures, and the risk management methods.

They will also have to provide the central bank with information about the number of clients, the average revenue since the gold trading floors put into operation, the highest and lowest daily revenues.

Banks are also requested to tell the SBV about their partners on the gold trading floors, the roles of banks in the operations of these floors.

The central bank asked banks to strictly obey the rules on safe ratios in operations and send the reports to the SBV prior to April 10, 2009.

Banks that do not have gold trading floors will not be allowed to open such centres until the SBV has new regulations.

Previously, the State Securities Committee asked securities trading companies to not open new gold trading floors and the firms that have had such floors have to report to the committee the activities of their floors.

Vietnam doesn’t have the clear legal corridor for the establishment of operation of gold trading floors yet. In developed countries, gold trading floors run very concentrated and each country has only several gold trading centres. For example, the US has only two centres, Comex and the Chicago Future Trade Exchange.

VietNamNet/VNE

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