The Prime Minister has ordered the State Bank of Vietnam to enhance administration of the gold sector, particularly gold-trading centres.

In fact, the public was still worried about the central bank’s prior proposed to close domestic gold bourses so to increase the security deposit rate to 100 percent of total net assets.

The proposal was designed to protect individual investors.

The central bank’s governor, Nguyen Van Giau, told the Vietnam News on Dec. 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 much a lot to set up offices and train staff,” a chief manager of a gold trading bourses 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 cooperating with banks would be allowed to open gold-trading bourses. It also stated that security deposit rates would be set at 10-15 percent of the total net asset value. However, no draft has been issued.

Market watchers agreed that regulations were necessary but that closing gold bourses would not end risky trading.

What happened on November 11when the domestic gold price reached a record high of 29.3 million VND per tael and numerous investors suffered heavy losses, should be a reminder about the risks involved with the precious metal market.

A series of proposals from the public have been made to deal with gold-trading problems, such as the administration of gold trading bourses by securities exchanges, or the central bank’s management of on-line gold trading, while the Ministry of Industry and Trade would manage physical gold trading, It has also been suggested that the Government set up an independent gold-trading management centre.

Some bank leaders have suggested that the central bank draw up strict criteria for companies and banks to set up gold trading bourses to select the best candidates. They also suggested that the security deposit rate be adjusted as done with regulated securities lending./.