The State Securities Commission has ordered securities companies to report any new operations with gold trading centres, acknowledging the recent rush of brokerages to the gold market as a means to survive the extended stock market downturn.
“In the face of the economic crunch and the slumping stock market, most securities companies have seen losses in their core line business, but they have seen profitable opportunities in gold transactions,” said Le Huy Hung, head of Artex Securities Co’s Service Department.
With no specific rules yet developed for the emerging field of brokering gold trades, the commission’s order is a stop-grap measure as relevant authorities draft appropriate regulations.
Under the commission’s document issued this week, securities firms that have not yet entered this field are barred from doing so until regulations have been issued.
Vietnam International Securities Co General Director Pham Linh said it was natural for securities firms to become gold brokers since gold had become a hot investment in recent months.
Linh’s firm coordinated with Wall Street Gold Joint Stock Co to open a gold agent in Hanoi , and was preparing to set up another in Ho Chi Minh City .
Transaction fees were 2,000 VND per tael of gold, with commissions set at various ratios.
Empower Securities Co has also cooperated with the Vietnam Gold Business and Investment Joint Stock Co to establish a gold agent which, after only one month in operation, already had about 100 accounts set up by gold investors, according to Le Nguyen Huy Tam, chief of marketing and sales at Empower.
Tam also noted that the services and management of a gold agent were similar to those of a securities brokerage.
Indochina , Viet Quoc, Dong Duong and Phuong Dong securities companies, as well as Mekong Housing Bank and Sai Gon Jewellery Co, were all offering services, and some were holding seminars to help gold investors sharpen their knowledge.
Nguyen Thanh Ky, Chairman of the Vietnam Securities Business Association, said concerned offices should legalise the activities to avoid disputes or corruption.
And, while some experts warned that this venture in gold trading was diluting securities firms’ technological and human resources, Artex Securities Co predicted that gold trading floors could continue joining with securities enterprises to provide shared brokerage services even once the stock market has recovered.
Source: VNA