Vietnam government wants more control of gold trading

Section:

From VietNam Net, Hanoi
Tuesday, December 8, 2009

http://english.vietnamnet.vn/biz/200912/State-Bank-told-to-monitor-gold-...

The prime minister has ordered the State Bank of Viet Nam to enhance administration of the gold sector, particularly gold-trading centres.

In fact, the public was still worried about the central bank's prior proposal to close domestic gold bourses or to increase the security deposit rate to 100 per cent of total net assets.

The proposal was designed to protect individual investors.

The central bank's governor, Nguyen Van Giau, said yesterday, December 7, that the bank would follow government suggestions.

"Let's do what the prime minister directs," he said, refusing to comment on the bank's earlier proposals.

About 20 gold-trading bourses, which are almost all owned by commercial banks, securities companies, and gold-trading firms, are not being governed by legal regulations.

"Before granting licences for us to operate, they should have thought about administration rather than a sudden close of bourses. We have invested a lot to set up offices and train staff," a chief manager of a gold trading bourse in Hanoi said.

Before the proposal, the central bank formed 11 draft regulations governing gold trading bourses. Among those was a regulation stating that only banks or companies co-operating with banks would be allowed to open gold trading bourses. It also stated that security deposit rates would be set at 10-15 per cent of the total net asset value. However, no draft has been issued.

General director of a HCM City-based gold bourse told Viet Nam News on condition of anonymity: "If the central bank had issued regulations last year, many things would be different now. Unfortunately, the issuance has been pending for a long time.

"Now there is too much pressure on the central bank, which is being too hasty and defensive."

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