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Securities companies keeping gold trading floors open   2009-04-02 - VietNamNet/DTCK

The State Securities Commission (SSC) has released a document, asking securities companies to report on the operation of gold trading floors they opened before and not to open any more floors at this moment. However, companies still keep opening more trading floors, ignoring the order.


SSC has asked securities companies to not open anymore gold trading floors until there are legal documents, guiding the opening and operation of the floors. Meanwhile, securities companies still continue opening more trading floors, and they have every reason to do that.


It remains unclear whether SSC will punish the securities companies that still open more trading floors after their order, but experts said that the story is worth more thought.


First, Dispatch No. 405, which asks securities companies to not open more trading floors, does not clearly stipulate from what time trading floors cannot be opened. Moreover, the document does not say exactly whether securities companies can open floors if they signed contracts with gold companies before the SSC’s document was promulgated.


As a result, securities companies try to dodge the laws by dating back the day of signing contracts with gold trading firms, even though they have just signed the contracts.


Second, the fact that attempts by securities companies to open gold trading floors shows that there is actual demand for gold transactions from investors.


The document by SSC stipulates that securities companies are now allowed to open gold trading floors until there are concrete regulations. However, it is unclear which agencies will promulgate the concrete regulations and when the concrete regulations will be promulgated.


In Decision No. 27, the Ministry of Finance allows securities companies, besides the main business, to provide other financial services, while gold trading is also a financial service. To date, there have not been any transaction regulations for gold trading floors, and therefore, there has not been any foundation to ask securities companies to not provide that kind of service.


An official from SSC admitted that it is unclear which state management agency will undertake the management over gold trading floors. Some say the management must belong to the State Bank of Vietnam, while others say to the Ministry of Industry and Trade.


There has not been any final conclusion about the operation of gold trading floors opened by securities companies. However, most securities companies are acting on the order receiving agents for gold trading firms. This means that securities companies just work for gold trading firms, who stay between the gold trading firms and investors, bringing investors’ orders to trading firms to get fees.

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