Since the second half of the year, A-shares have continued to fluctuate and the macro-economy has hardly improved. Precious metals have attracted attention due to their safe-haven characteristics. In addition to securities, futures, real estate, and foreign exchange, the precious metal trading market continues to grow and gradually develop into an important investment field in people's economic life. From the perspective of national trading platforms, Shanghai is home to two major national precious metals trading platforms, the Shanghai Gold Exchange and the Shanghai Futures Exchange. Local regional trading platforms have also emerged in recent years. Among them, the Guangdong Precious Metals Trading Center has developed rapidly since its establishment in June 2010. Currently, the platform has become the second largest regional precious metals trading platform in China after the Tianjin Precious Metals Exchange. Over the past five years, the Guangdong Precious Metals Trading Center has not only carefully built a leading domestic precious metals spot electronic trading system, but also set an example in leading industry standards, talent training, investor education and other aspects, demonstrating its industry responsibilities as a leader in precious metals platforms.
As the helmsman of the Guangdong Precious Metals Trading Center, President Zhang Jiong is determined to bring China's precious metals trading platform to the world. Therefore, he has set a development strategy for the trading center in the next few years, which is to jointly build a cross-border precious metals spot trading market with RMB as the settlement currency under the CEPA framework with precious metals trading institutions in Hong Kong and Macao. Through the transmission mechanism of precious metals trading volume and transaction prices, it will have an impact on international precious metals trading pricing, and ultimately gain the pricing power and voice over precious metals trading.
Carefully build an advanced trading system
Guangdong Province has always had my country's important precious metal production and sales markets and a number of internationally influential industrial distribution centers, forming a complete industrial system from precious metal resource mining and smelting to processing, manufacturing and sales. The output value of the precious metal processing industry accounts for more than 70% of the country's total. At the same time, Guangdong is also adjacent to Hong Kong, the world's fourth largest gold trading market. It can be said that Guangdong occupies a pivotal position in the gold market in my country and even the world. However, the construction of its precious metal spot electronic trading market is relatively lagging behind. This is extremely inconsistent with Guangdong's status as a major economic province and a major precious metal industry province. Therefore, in 2008, the Guangdong Provincial Government began planning to establish a precious metal element trading market in Guangdong to realize the transformation and upgrading of the traditional market, serve the real economy, and develop in parallel with the two national trading platforms in Shanghai.
After two years of preparation and establishment, with the approval of the Guangdong Provincial Government and jointly initiated by Guangdong Gold Company and Guangdong Lixin Enterprise Co., Ltd., the Guangdong Precious Metal Trading Center was officially established in June 2010. It became a provincial precious metal trading platform funded and controlled by the Guangdong Provincial State-owned Assets Supervision and Administration Commission, and also kicked off the construction of the precious metal spot electronic trading market in Guangdong Province.
If a worker wants to do his job well, he must first sharpen his tools. For a trading platform, the stability and efficiency of the trading system is crucial, not only to ensure the safety of investors' property, but also to avoid certain financial risks. my country's precious metals trading industry started late and developed slowly. The level of information technology and trading system research and development need to be improved. In view of this, when the Guangdong Precious Metals Trading Center was first established, it regarded IT construction as a key factor in improving the platform's influence, and actively cooperated with industry-leading solution providers and hardware equipment manufacturers to form a high-level IT professional service team, established a dedicated computer room, and equipped with a powerful IT processing server system. By November 2012, the trading center's precious metal spot electronic trading platform began to operate, and the Guangdong Precious Metals Trading Center also officially entered the fast lane of development.
In 2013, the center continued to invest more than 50 million yuan to develop a more advanced and stable second-generation precious metal spot trading system platform and launched it in March 2014. The second-generation trading system has the advantages of fast market transmission, fast data calculation, fast transaction speed, and high security performance. In terms of the maximum number of users it can carry, hundreds of thousands of users can be online at the same time; in terms of concurrent transactions in comprehensive scenarios such as market price, price limit, and risk control, the throughput is as high as 4,000 transactions/S, with peak returns of more than 10,000 transactions; in terms of information security, it has initially passed the National Ministry of Public Security’s Level 3 Information Security Level Protection Qualification Certification. Through the cooperation of the leading six systems of "trading system, decision analysis system, customer care system, member management support, spot management system, and transaction operation management system", the trading center has achieved an all-round and intelligent guarantee for the smooth operation of the trading business, while providing customers with humanized and personalized services. While further ensuring the security level of the information system, all types of illegal and illegal operations are eliminated as much as possible.
"Every second counts in the trading field. If the trading software runs slower for a second, customers may suffer huge losses. The trading center has always advocated making transactions safer, more standardized, and easier. If the software cannot keep up, everything is empty talk." Zhang Jiong said when talking about the importance of trading software Shi said that with the rapid development of the precious metals industry, the level of information technology and trading system research and development will become one of the main factors restricting its development. A slight lag may hinder the healthy and orderly development of the industry, allowing black platforms and small platforms to take advantage of it and disrupt the normal order of the market.
Highlight financial attributes to serve the real economy
At the end of 2011, Zhang Jiong, who has more than ten years of working experience in the financial industry and senior management experience in large state-owned enterprises, was transferred to the Guangdong Precious Metals Trading Center as general manager. For Zhang Jiong, entering the field of precious metals is tantamount to starting a business for the second time. At that time, the Guangdong Precious Metals Trading Center was established with the mission of driving industrial transformation and upgrading and serving the real economy. There were more than 20 precious metals trading platforms independently approved by each province. Competition was fierce. Guanggui also faced the problem of how to achieve misaligned development and how to innovate under layer upon layer of policy restrictions. Different from the previous leadership team's positioning of commodity attributes of the trading center, Zhang Jiong, who was born in finance, viewed the Guangdong precious metals market from the perspective of financial attributes when he took office. In his view, only by developing Guangzhou from a financial perspective can the above series of problems be solved.
To find Guanggui's positioning, we must start with the characteristics of precious metals. Compared with other commodities, precious metals have both commodity attributes and financial attributes, and the financial attributes are particularly significant. A multi-level precious metal trading market has been formed internationally, that is, the basic gold and silver spot market, including processing, manufacturing and wholesale, represented by the Zurich gold market; the over-the-counter market in the middle is an invisible market composed of many gold merchants, represented by the London gold market. The five major gold merchants determine the gold pricing every day, and investors around the world use the fixed price as gold. An important reference for investment; there is also an on-site futures trading market, represented by the New York and Chicago gold markets in the United States. Currently, the New York gold market has become the largest and most active gold futures market in the world, dominated by large hedge funds and institutional investors. The huge trading volume has attracted many investors to join, and the entire gold futures trading market has ample market liquidity.
The three markets have different attributes and regulatory models. Among them, the spot market emphasizes the attributes of commodities, with a wide range of categories, and is regulated by commercial departments in various countries; the futures market is the top form of precious metal trading, which basically no longer has commodity attributes, and more reflects the financial attributes of precious metals. The trading rules are relatively complex and the supervision is the most stringent. Our country is regulated by the certificate authority. Supervised by the Supervisory Commission, the entry threshold is high; the OTC market is a connecting market, with both financial attributes and commodity attributes. Its number is relatively large compared to the on-site market, and it is difficult to count without supervision. After the 2008 financial crisis, supervision has gradually strengthened, and my country is currently supervised by local governments.
"Functionally speaking, exchanges should undertake the four major functions of trading, information release, delivery and financing." Zhang Jiong said that domestic futures exchanges including the Shanghai Futures Exchange are all on-site markets, realizing the functions of trading and information release; while bank paper gold, paper silver, Shanghai Gold Exchange T+D, etc. are OTC markets, realizing the functions of trading, information release or delivery, but they all lack financing services for industrial institutions. As a trading platform for precious metal elements, the exchange's financing function is reflected in providing enterprises with supply chain financial services such as warehouse receipt pledge, that is, moving traditional offline supply chain finance online to realize OTO. It is worth noting that there is currently no exchange in the domestic precious metals trading market that can achieve this function.
Based on the above considerations, Zhang Jiong’s positioning of Guanggui is focused on the development of regional trading markets and over-the-counter market models, emphasizing financial attributes to serve the real economy.
Zhang Jiong introduced that as a precious metals trading platform, Guanggui serves the real economy mainly in three aspects: first, it creates about 100,000 jobs and provides a platform for college students majoring in finance to display their talents; second, it builds an information release platform focusing on industrial raw material trading in South China; third, it establishes an OTO online and offline market that combines OTO online and offline, so that the terminal outlets of sales become delivery points.
In order to increase support for the real economy and serve precious metals and upstream and downstream related production enterprises, Guanggui established the Bulk Commodity Division in 2015 to innovate the OTO industry model, build a B2B industry service platform, and create a "four streams in one" (transaction flow, information flow, logistics and financing flow) operating system, extending traditional offline commodity trade and supply chain finance to an online B2B precious metal industry electronic trading platform, closely connecting the two major markets of commodity finance and spot trade. It is estimated that after the project is completed, it will gradually attract about 500 companies including upstream precious metal smelters, raw material traders, wholesale retailers, etc., and the annual sales output value will exceed 50 billion yuan.
Guanggui has regarded the B2B industrial service platform as a key task at present and in the future, and has conducted separate financial accounting with a total investment of approximately 100 million yuan. At present, more than 30 full-time personnel required for the project have been put in place, and related work such as office space leasing, trading system bidding, IT equipment procurement, logistics warehouse location selection, product research and development, and transaction rule revision have been completed. The entire system will be put into trial operation before the end of 2015.
Leading the development of industry standards
Although the investment demand for precious metals has always existed, there is still a relative lack of formal precious metals trading platforms, relevant publicity and education are not in place, and some risk events occur frequently in the industry, which has also cast a shadow on the development of the precious metals market. After the establishment of the Guangdong Precious Metals Trading Center, it has done enough homework to protect the interests of investors and standardize precious metals trading behavior. It has successively promoted various tasks such as special professional competency certification for "precious metals trading operations", investor education, initiated the establishment of the Guangdong Precious Metals Investment and Financing Association and the Guangdong Precious Metals Dispute Mediation Center, and spared no effort to convey the positive energy of the precious metals industry.
First of all, in order to prevent some unscrupulous traders from using fraudulent means to make profits, Guanggui has made many innovations based on the traditional trading model. First, the trading system is no longer provided by traders, but by a third-party trading platform, thereby ensuring the stability and independence of the trading system; second, investors' trading funds are no longer transferred to the dealer's account and controlled by the dealer, but are entrusted to a clearing bank for third-party custody to ensure the safety and liquidity of the funds; third, the dealer's quotation is in the third On the basis of the intermediate guide price issued by the third-party trading platform, according to the quotation management rules of the trading platform, combined with its own spot inventory or demand, the buying or selling price is quoted to ensure the rationality of the transaction quotation; fourth, transaction clearing is carried out by the third-party trading platform and the clearing bank, and is completed together to ensure the timeliness of transaction clearing.
In response to the problem of incomplete industry regulations and employees operating privately for clients, Guanggui actively initiated a series of measures such as formulating industry regulations, standardizing the development of member units, and establishing a training system for employees, which enhanced the credibility of the industry and promoted the healthy development of the industry. Guanggui believes that the lack of a unified industry standard system is one of the main reasons for the current market chaos and the self-disruption of operating institutions, so he decided to start from standardizing industry service standards and create a qualification certification system for the Guangdong Precious Metals Trading Center. In October 2013, Guanggui innovatively launched the training and certification work of the "Guangdong Precious Metals Trading Center Practitioner Qualification Certificate", and collaborated with Sun Yat-sen University Press to publish the "Guangdong Province Precious Metals Trading Center Practitioner Qualification Tutorial", and officially launched the first round of training and assessment for the Guangdong Province Precious Metals Trading Center Practitioner Qualifications in November. It is through this series of standardized management measures that the trading center and its members have formed unified professional standards. Not only has it embarked on a healthy and orderly development track, but it has also won a good reputation from all walks of life. In the next step, Guanggui will establish a complete professional qualification certification system to standardize the behavior of employees, enhance their sense of industry identity and belonging, and promote the healthy development of the industry.
In addition, Guanggui also took the lead in establishing the Guangdong Precious Metals Investment and Financing Association, which will improve the organizational structure, strengthen management, formulate a member self-discipline system, establish membership access thresholds, increase industry influence and voice, and standardize the precious metals investment and financing market.
In terms of investor education, since February 2014, the Guangdong Precious Metals Trading Center has successively launched multiple public welfare investor education columns on CCTV Securities Channel, China People’s Broadcasting Station Economic Voices Channel, Guangdong Radio Finance Channel, Shenzhen Radio Traffic Channel and other media. The 2015 upgraded version of investor education – "Guanggui Academy"'s investor education series animation and comic topics, makes investment education more popular through the relaxed and lively animation form. In the same year, Guanggui also launched Guangdong Microdisk, a practical and innovative investor education platform. It integrates mobile Internet thinking and financial products, allowing investors to use online training and low-risk real environment exercises anytime and anywhere to help investors understand the rules of precious metals trading and market laws and regulations, establish scientific investment concepts, and strengthen risk awareness.
On June 20, 2014, the Guangdong Precious Metals Trading Market Dispute Mediation Center was jointly initiated by Guanggui, Guangzhou Arbitration Commission, Guangdong Precious Metals Investment and Financing Association, Guangdong Zhuoxin Law Firm, etc. Investors can obtain consultation, mediation and other legal services from the center through dedicated telephone lines, dedicated emails, and on-site consultation. It is the first of its kind in China to establish a precious metals transaction dispute resolution center composed of professionals from the legal and financial fields.
Professional development reaches new heights
Talent is another bottleneck restricting the development of the industry. Guanggui has put a lot of thought into cultivating precious metal talents.
Just like the securities industry that just started more than 20 years ago, the precious metals trading field was also accompanied by problems such as a lack of professional talents and a lack of industry regulations in the early stages of rapid development. As a pioneer in the precious metals industry and social responsibility, the Guangdong Precious Metals Trading Center has been committed to improving the professional level of employees and instilling the business philosophy of "compliance management and strict self-discipline" since its establishment.
In 2013, the promotion of the "Guangdong Precious Metals Trading Center Practitioner Qualification Certificate" filled the gap in the domestic precious metals trading industry that did not have a complete set of behavioral norms for practitioners. With the further popularization of qualification certificates, Guanggui's attempts to standardize and specialize the industry have received support and guidance from relevant government departments. In November 2014, the Guangdong Provincial Vocational Skills Appraisal and Guidance Center commissioned the Guangdong Provincial Precious Metals Trading Center to develop the "Special Vocational Ability Certification for Precious Metals Trading Operations". This is a useful attempt guided by government functional departments and led by enterprises to standardize industry positions. At this point, the "Guangdong Precious Metals Trading Center Practitioner Qualification Certificate" has been transformed from an internal professional skills certification into a professional competency certification managed by the Guangdong Provincial Vocational Skills Appraisal Guidance Center. Information about the certificate holder can be found on the official website of the Guangdong Provincial Department of Human Resources and Social Security, which provides a strong guarantee for the credibility of the professional level of the certificate holder.
If establishing standardized professional standards for various positions in the industry is the first step in the professional development of compliance in Guanggui, then how to solve the lack of talents in the industry and cultivate more high-quality practitioners is the fundamental strategy to guide the healthy development of the industry.
In March 2015, the Guangdong Precious Metals Trading Center and Guangdong University of Finance and Economics signed a cooperation agreement on the "Guangdong Commodity Finance Research Center and Talent Training Base". This is a powerful measure for Guanggui to cultivate professional talents and improve the professional service level of precious metals trading. Guanggui hopes to use Guangdong University of Finance and Economics’ rich teaching staff and deep professional accumulation to transform professional skills related to precious metal trading into theoretical knowledge, compile training materials suitable for the different needs of educational institutions at all levels of universities, technical secondary schools and technical schools, and establish professional elective courses and a scholarship and bursary system in the school. When fresh graduates complete elective courses related to precious metals trading, Guanggui will also guide them to conduct internships and employment in the industry, and use practical actions to accumulate development power for the precious metals trading industry.
At the same time, with the help of the Guangdong Provincial Vocational Skills Appraisal and Guidance Center, Guanggui will also conduct in-depth cooperation with more universities and technical schools to provide pre-training of professional knowledge and work skills to school students, so as to continuously provide professionally trained talents for different positions in the industry.
Guanggui has taken a two-pronged approach to establish professional standards for job standards and cultivate professional talents in the industry. In the arduous task of curing chaos in the precious metals trading industry, Guanggui has used solid footprints to push the compliance and professional development of the industry to a higher level step by step.
Create the world’s “Chinese price” for precious metals
At present, the prices of gold, silver, platinum and other precious metals in our country are calculated by converting international prices. The development strategy set by the Guangdong Precious Metals Trading Center is to jointly build a cross-border precious metals spot trading market with RMB as the settlement currency under the CEPA framework, together with precious metals trading institutions in Hong Kong and Macao, and to have an impact on the pricing of international precious metals transactions through the transmission mechanism of precious metals transaction volume and transaction prices, and ultimately gain pricing influence and say in precious metals transactions.
The Guangdong Provincial People's Government's "Several Opinions on Supporting the Accelerated Development and Construction of Guangzhou Nansha New Area" specifically mentioned: Support the Guangdong Precious Metals Trading Center in building a cross-border precious metals trading market in Nansha New Area, and launch RMB-denominated cross-border precious metals trading products for the international market. Using the precious metal trading center as a platform, we will mobilize and utilize the precious metal resources of Hong Kong, Macao and the world, actively expand the trading of commodity precious metals such as silver, and launch the trading of diamonds and other precious jewelry when conditions are ripe.
Zhang Jiong said that Guanggui is actively striving to build a cross-border RMB precious metals market in the Nansha Free Trade Zone, giving full play to the geographical advantages of being adjacent to Hong Kong and Macao, and effectively connecting with the precious metals trading markets of Hong Kong and Macao to form a financial agglomeration effect, which will further promote financial innovation and cooperation between Guangdong, Hong Kong and Macao.
"Under the current circumstances, coordinating the over-the-counter market and the on-site market and establishing a standardized quotation platform are the focus of the trading center, and we hope to transmit the transaction volume and price of the domestic market to have an international impact." Zhang Jiong said.
It is reported that the cross-border center will complete the feasibility study within this year and start going online next year. It will strive to develop into a mature market recognized by the industry within three years.
In the next step, the trading center will continue to accelerate the pace of becoming bigger and stronger. First, it will strengthen brand cultivation and promotion and strive to improve the brand image of the trading center; secondly, it will increase investment in scientific research and strengthen IT talent team and system construction; thirdly, it will strengthen precious metals trading models and business innovation, and launch trading varieties that are more suitable for the market; finally, it will strengthen cooperation with banks and other financial institutions to promote the in-depth development of the precious metals market.
