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||6 January 2010
Vietnam: Central bank sees high risks in gold trading floors
The State Bank of Vietnam (SBV) has announced that public gold trading floors lacked legal grounding and exhibited inherent risks that might cause insecurity to the macro-economy, VNBusinessNews.com reported.
Prime Minister Nguyen Tan Dung last week required all gold trading floors to be shut down and all domestic investment accounts to be terminated by March 31, 2010.
Gold trading, from the perspective of the Government, is becoming a high-risk activity for both investors and brokers alike. A large amount of capital, which should have been invested in productive activities, has been channelled into speculative gold trading and has not created real value for the economy.
The central bank is in charge of regulating certain activities relating to gold trading: import and export in the form of raw material and trading via foreign accounts. Many gold trading floors, however, operate independent of Government regulations.
This unregulated environment has seen many disputes and petitions have occurred in recent years between investors and gold trading floors. As such, investors, especially individuals who trade on their own accounts, are unaware of considerable risks inherent in such trading.
The SBV does not regulate other activities relating to gold trading, production and processing. Neither does the bank oversee gold and jewellery import-export activities, those licensed by the departments of the Ministry of Planning and Investment and the Ministry of Industry and Trade, as well as the General Department of Customs.
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