A directive from the China's State Council has called into question the legal status of several domestic stock exchanges, including Tianjin's precious metal exchange. The questions concern the fact the exchanges are overseen by local municipalities, not the central government.
The Tianjin precious metal exchange has outlets in Guangzhou, but many investors have exited the market for the time being out of fears over the survival of the exchange.
The State Council's order, issued in late November, caused a stir in the domestic gold investment market, as it requires the approval of the State Council for the establishment of various exchanges.
Under these guidelines, only Shanghai's gold exchange meets the requirements. The order affects six major exchanges in Tianjin, Hunan, Zhejiang, Kunmin, Shandong, and Shenzhen, as well as 10 other smaller trading houses.
As a result, the Hunan exchange has decided to suspend online trading for spot gold starting Dec. 24. The five other major exchanges have yet to react to the order. The largest, in Tianjin, boasts hundreds of agents throughout the nation, including dozens in Guangdong province. In recent several months, its trading value has fluctuated between one quarter and one third of the Shanghai metal exchange's value.
The Tianjin exchange boasts 15 members and 40 outlets in Guangzhou, making its presence greater than that of Shanghai's metal exchange in the city. In Guangzhou, 5-6 of 10 gold investment companies have traded on the Tianjin exchange.
As a result, many investors have exited the market or scaled down their trading value, due to concerns the State Council's guidelines' could shut down some exchanges or drastically change their rules.
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The Tianjin precious metal exchange has outlets in Guangzhou, but many investors have exited the market for the time being out of fears over the survival of the exchange.
The State Council's order, issued in late November, caused a stir in the domestic gold investment market, as it requires the approval of the State Council for the establishment of various exchanges.
Under these guidelines, only Shanghai's gold exchange meets the requirements. The order affects six major exchanges in Tianjin, Hunan, Zhejiang, Kunmin, Shandong, and Shenzhen, as well as 10 other smaller trading houses.
As a result, the Hunan exchange has decided to suspend online trading for spot gold starting Dec. 24. The five other major exchanges have yet to react to the order. The largest, in Tianjin, boasts hundreds of agents throughout the nation, including dozens in Guangdong province. In recent several months, its trading value has fluctuated between one quarter and one third of the Shanghai metal exchange's value.
The Tianjin exchange boasts 15 members and 40 outlets in Guangzhou, making its presence greater than that of Shanghai's metal exchange in the city. In Guangzhou, 5-6 of 10 gold investment companies have traded on the Tianjin exchange.
As a result, many investors have exited the market or scaled down their trading value, due to concerns the State Council's guidelines' could shut down some exchanges or drastically change their rules.
Read more:
