SGE on Track With Gold Futures Trade Application
By Interfax-China
08 Jun 2007 at 08:59 AM GMT-04:00
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SHANGHAI (Interfax-China) -- The Shanghai Gold Exchange, China's sole precious metals spot-trade platform, will submit an application for a gold futures trading license to the China Securities Regulatory Commission at the end of June, a senior SGE official told Interfax today at the Metal Mining North-East Asia 2007 conference, held in Shanghai.
"We've already attained approval from the People's Bank of China and will submit a final approval application to the CSRC at the end of this month. The futures trading system is all ready to go. Now, all we need is CSRC approval. There is also the possibility that we will cooperate with the Shanghai Futures Exchange on gold futures in the near future," director general of the SGE, Shen Xiangrong, said.
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When questioned as to foreign bank membership, Shen said that some of the nine foreign banks with current operations in China will make up the first batch of SGE members.
"We have not yet decided on a short-list of which banks will be included, but the Hongkong and Shanghai Banking Corp. Ltd. (HSBC) will surely be one of them," he said.
The SGE is considering a cap on both foreign exchange and gold trading volumes for foreign bank members, according to Shen.
Shen added that the SGE, in cooperation with the central bank, the People's Bank of China, is in the process of formulating foreign bank member trading regulations.
Shen stressed that while entirely foreign-invested companies will be barred from SGE membership, joint-venture gold mining companies and foreign banks will be welcome to apply for membership.
The SGE is planning to launch a price system enquiry among dealers next year.
"Dealers will be able to suggest' bid' and 'ask' prices as the day's trading starts and then the SGE will set a benchmark price for the day," he explained.
The SGE will focus on expanding individual gold trading this year, aiming to lower the entrance level from a current 100 grams to 50 grams in the future. The SGE is also negotiating with the Chinese Gold and Silver Exchange Society, in order to further expand its presence in both the Southeast Asian and global market.
In other news, five top foreign banks have gained approval from the central bank, or the People's Bank of China, to become the SGE’s first foreign members, signaling the opening up of China's domestic gold trading market, state media reported today.
The five newly recruited members are the Hongkong and Shanghai Banking Corp. Ltd., Standard Chartered Bank, the Bank of Nova Scotia , UBS AG and Societe Generale. All the banks are members of the London Bullion Market Association.
The SGE aims to open up China's gold trading market through the involvement of foreign banks, and to invigorate gold trading volumes and liquidity. However, foreign banks' involvement with the SGE, including what quota they will be issued with, has yet to be worked out, according to Shanghai Securities News.
PBOC is currently looking into how to further loosen gold import and export regulations.
The SGE, China's sole authorized physical gold trading platform, received preliminary approval from the central bank to launch gold futures trading in April this year. The SGE currently trades spot gold and spot-deferred silver, platinum and gold.
© Interfax-China 2007.
This article comes from Interfax China Commodities Daily, a daily digest produced by Interfax News Agency in Mainland China. To receive 10 free copies of this, please e-mail david.harman@interfax-news.com. |
