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Financial regulators said Monday they had mapped out a plan under which gold would be publicly traded on a dedicated exchange from the first half of 2014.
As part of economic policymakers’ efforts to bring gold prices into the open, a state-controlled spot gold exchange will be set up next year as a sub-entity of the Korea Exchange, the nation’s main securities trading bourse.
According to the Financial Services Commission, the policy has been finalized after a series of talks between the ruling Saenuri Party and the Cabinet.
Under the plan, gold importers, refiners and wholesalers will have to deposit their gold in a depository and trade it with potential buyers through an electronic trading system. Buyers will bid for ownership in the depository.
“For gold transactions, the Korea Exchange will be in charge of the operation and settlement of electronic transactions. The Korea Securities Depository will take on the storage and deposition,” said the FSC.
Like the stock trading market, regulators will take criminal or civil actions against price manipulators.
The FSC predicted that “the coming exchange will be effective in terms of broadening the administration’s taxation infrastructure as well as blocking illicit trading of gold in the underground economy.”
The nation’s tax authorities estimated that some 70 percent of gold bars and other gold products were traded through black markets.
Over the past few decades, fraudulent dealers sold gold to fake companies at prices far lower than normal on condition the firms would take on value-added taxes due for the transactions.
After the deals were processed, the company would be put through bankruptcy or be closed down without paying the taxes.
In another scheme, dealers manipulated their trade documents, disguising transactions between themselves as overseas trade.
Meanwhile, aside from the gold exchange, policymakers are seeking to establish a commodities exchange in a bid to cover oil, agricultural products and other commodities, financial industry sources said.
By Kim Yon-se (kys@heraldcorp.com)
As part of economic policymakers’ efforts to bring gold prices into the open, a state-controlled spot gold exchange will be set up next year as a sub-entity of the Korea Exchange, the nation’s main securities trading bourse.
According to the Financial Services Commission, the policy has been finalized after a series of talks between the ruling Saenuri Party and the Cabinet.
Under the plan, gold importers, refiners and wholesalers will have to deposit their gold in a depository and trade it with potential buyers through an electronic trading system. Buyers will bid for ownership in the depository.
“For gold transactions, the Korea Exchange will be in charge of the operation and settlement of electronic transactions. The Korea Securities Depository will take on the storage and deposition,” said the FSC.
Like the stock trading market, regulators will take criminal or civil actions against price manipulators.
The FSC predicted that “the coming exchange will be effective in terms of broadening the administration’s taxation infrastructure as well as blocking illicit trading of gold in the underground economy.”
The nation’s tax authorities estimated that some 70 percent of gold bars and other gold products were traded through black markets.
Over the past few decades, fraudulent dealers sold gold to fake companies at prices far lower than normal on condition the firms would take on value-added taxes due for the transactions.
After the deals were processed, the company would be put through bankruptcy or be closed down without paying the taxes.
In another scheme, dealers manipulated their trade documents, disguising transactions between themselves as overseas trade.
Meanwhile, aside from the gold exchange, policymakers are seeking to establish a commodities exchange in a bid to cover oil, agricultural products and other commodities, financial industry sources said.
By Kim Yon-se (kys@heraldcorp.com)
