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Shanghai Gold Exchange: Building a Better Future for the Global Gold Market

By Jiao Jinpu, Chairman, Shanghai Gold Exchange

Published on January 12, 2021
SGE head office in Shanghai

In October 2020, Shanghai Gold Exchange (SGE) celebrated its 18th anniversary. Two decades on, SGE has built itself as the engine of China’s gold market, bringing a wide array of products, improved market structure and further liberalization, while serving as a bridge between the domestic and international markets via its Main Board and International Board.

The exchange currently boasts a multi-tiered, full-fledged market system that trades gold, silver, platinum and gold coins, covering market segments including price matching, benchmark price trading, price asking, quote-driven trading, leasing and gold ETFs. SGE has ranked as the world’s largest exchange for physical gold trading for 14 years straight – in 2020, it recorded RMB 43.32 trillion (US$ 6.71 trillion) in trading revenue, with 58,671.55 tonnes of gold and 4,214,652.42 tonnes of silver traded.

SGE’s track record so far has been impressive, and yet challenges are ubiquitous. The coronavirus pandemic has significantly impacted global politics and trade, and its shockwave to the gold market was unprecedented. Against the backdrop of increasing uncertainty in economies and growing turbulence in the financial market, marketplaces in different time zones and regions are highly correlated, and therefore risks in one market, industry or field can easily be transferred to another. In the face of new risks and challenges, no single market could stand aloof. Quite the contrary – only by addressing challenges together through strengthened cooperation can all stakeholders in the market share opportunities for development and create a future with mutual benefits.

Trading Revenue of Gold and Silver on SGE from 2016 to 2020

BLAZING NEW TRAILS

In recent years, SGE has spared no efforts to promote cooperation and connectivity with the international market, sharing the benefits of China’s gold market reform, and bringing mutual development opportunities.

In September 2014, SGE launched the International Board, which has become a vital channel for international players to access the Chinese market. So far, 89 international members and 87 international institutional clients have contributed a total of RMB 17.4 trillion (US$ 2.7 trillion) in trading revenue.

Meanwhile, SGE has enhanced connectivity with major international financial centers and marketplaces in Belt and Road countries over the past six years, as exemplified by the Shanghai-Hong Kong Gold Connect and the Gold Road Project that aims to tap gold industries in Belt and Road countries.

In April 2016, the world’s first RMB-denominated gold benchmark price made its debut, followed by the first RMB-denominated silver benchmark price three years later. By cross-licensing with the CME Group, SGE has successfully introduced the benchmark price into the world’s largest futures gold market with its listing of Shanghai Gold-based futures contracts. Together with SGE-listed NYAuTN contracts, which are based on the COMEX Gold Futures Asia Spot Price and denominated in CNY, the pair of innovative products have provided investors at home and abroad with a convenient way of accessing both markets. Since October 2019, the two products have respectively seen 243.6 tonnes and 241.18 tonnes in trading volume.

ONGOING INFRASTRUCTURE REINFORCEMENT

In its 18 years of operation, SGE has made it a point to continuously improve its infrastructure and market services. Product innovation is on the right track. Seven gold ETFs have been newly listed, and exchange-traded physical gold options and multilateral price asking products are in development. Trading hours have also been extended to better link international marketplaces, and will be further lengthened to cater to market needs. In terms of infrastructure reinforcement, SGE has initiated the development of the 4th Generation of IT system to build a solid foundation for future growth.

Risk management is also high on the agenda. SGE has been working on improving the central counterparty clearing and risk management system in line with the international Principles for Financial Market Infrastructure, and was accredited by the Chinese central bank as a qualifying central counterparty in 2020. Recognition of a third-country (non-EU) central counterparty is underway.

Meanwhile, the exchange has been proactively participating in global market governance. By holding up to the highest international bars, SGE is committed to building a more regulated and scientific “Chinese Standard” while taking into account domestic needs. SGE has been actively engaged in the kilobar standard initiative to provide a fair, fungible and trustworthy physical gold standard to market players. It will also continue its research and cooperation on responsible sourcing so that China continues to be a responsible country in the gold industry.

Trading Revenue on SGEI (Unit: Billion RMB)

USHERING IN A NEW CHAPTER

With the pandemic still raging, the international economic and financial situation is even more complicated and volatile with challenges and opportunities ahead. As such, SGE will focus on the following aspects to reinvigorate the market:

  • Stick to business innovation. The exchange will offer more choices to the market by stepping up listing innovative products such as price matching options and performance-guarantee price asking contracts, while further exploring more scenarios for the reference of Shanghai Gold and Shanghai Silver benchmark prices.
  • Pursue technological advances. SGE is determined to embrace technological innovation in support of technological development in the gold industry. Reinforced IT infrastructure and the application of state-of-the-art digital technology will empower a digitalised and intelligent gold market in the near future.
  • Deepen win-win cooperation. China’s 14th Five-Year Plan has proposed the general target of fostering a new development pattern where domestic and international markets can boost each other and building a new economy with a higher level of opening-up. In line with this national strategy, SGE will therefore seek new ways and possibilities to deepen cooperation and dialogue with international marketplaces and institutions in areas of product R&D, business expansion and information sharing.

Today, in the global gold market, all participants are interdependent. We all need to forge stronger communication and cooperation so the industry can collectively tide over challenges, and contribute our wisdom to a better future of the global gold market that will benefit all.

JIAO JINPU, Ph.D and researcher of Economics, is the chairman of Shanghai Gold Exchange and a member of the 13th Shanghai Municipal Committee of the Chinese People’s Political Consultative Conference (CPPCC) and deputy director of its Economy Committee. He previously spent nearly 30 years at the People’s Bank of China in a variety of roles covering research and policy formulation on financial reform, monetary policy, financial regulation, inclusive finance and financial consumer protection. He was also the general director of PBC’s Financial Consumer Protection Bureau, and deputy director of its Research Bureau.

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Lee Jia Yi

OPERATIONS & ADMIN EXECUTIVE
Before joining SBMA, Jia Yi worked as an Admin & Reporting Officer in her previous role. She holds a Diploma in Business & Social Enterprise from Ngee Ann Polytechnic. Jia Yi is responsible for managing and maintaining physical and digital files in SBMA, supporting invoicing processes, reconciling receivables and payables, coordinating meetings and conferences. Additionally, she will provide support to the team and assist the Business Director in managing the Association’s office operations and general administrative activities.

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Emily Oh

OPERATIONS & ADMIN EXECUTIVE
Emily Oh is the Operations & Admin Executive, a seasoned professional who values teamwork and effective communication. She is skilled at adapting to new challenges and takes a proactive and resourceful approach to every task. Before joining SBMA, Emily had experience coordinating international travel arrangements and spearheading community initiatives. Her role at SBMA will be providing operational and administrative support for projects and other matters to the team.

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Clara Chang

MARKETING & COMMUNICATIONS EXECUTIVE
Clara Chang joins SBMA as the Marketing & Communications Executive, enriching the team with her extensive experience in content creation, social media management, and digital marketing. Prior to joining SBMA, Clara held the position of Marketing Executive at her previous job. She holds two bachelor’s degrees from the University at Buffalo, one in International Trade and another in Geographical Information Science. Her core duties will include maintaining the SBMA website, managing the quarterly Crucible newsletter, among other responsibilities.

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Mr John Levin

Global Metals
TD Securities
John Levin is the Head of Metal Sales & Trading – APAC at the Toronto Dominion Bank’s Singapore office. Prior to this role, he devoted seven years to leading precious metal sales for the ANZ banking group in his home country, Australia. Notably, from 2009 to 2011, John played a significant role on the management committee of the London Bullion Market Association while serving as the Head of Precious Metals Sales for HSBC Global Banking and Markets in the UK.

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Fabian Lew

MARKETING & COMMUNICATIONS OFFICER

Fabian was a Business Development and Marketing Associate before joining SBMA. He graduated from Singapore Management University with a Bachelor’s degree in Economics.

He has joined SBMA since February, 2022.

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Margaret Wong

BUSINESS DIRECTOR

Margaret Wong, Business Director at SBMA (Singapore Bullion Market Association), brought valuable experience from her previous role at the World Gold Council (WGC). Her tenure at WGC provided her with extensive exposure to the gold community in Singapore and the broader region. This background has been instrumental in establishing strong working relationships within the industry.

Margaret’s role at SBMA encompasses a diverse range of responsibilities. She oversees office management, business support processes, finance, and administrative functions essential for the smooth operation of the team and management committee. Additionally, Margaret handles membership matters, member communications, and addresses public inquiries related to SBMA.

One of Margaret’s key responsibilities is coordinating with the Event Management Company for SBMA’s prestigious annual event, the Asia Pacific Precious Metals Conference. This flagship conference plays a crucial role in the industry, making her involvement pivotal in its success.

Described as resourceful and self-motivated, Margaret Wong brings a wealth of skills and experience to her role at SBMA, ensuring efficient operations and effective engagement within the precious metals community in Singapore and beyond.

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Albert Cheng

Chief Executive Officer

Albert Cheng joined the World Gold Council in March 1993 as a Regional Manager, becoming Managing Director, Far East in 2003. He retired at the end of March 2015 and was subsequently named its Advisor. He has also been an International Advisor to the Shanghai Gold Exchange since 2002.

His marketing career began with Dentsu Young & Rubicam, Hong Kong in the early 80’s. He began gold marketing in July 1985 when he joined the Royal Canadian Mint as a Regional Manager for Southeast Asia.

He was appointed honorary CEO of SBMA in November 2015. He is responsible for the success and strategic development of SBMA, represents the interests of the Association, and is responsible for all the legal and regulatory aspects of the work of the Association. He is the primary contact for regulators and government bodies on bullion market development.

Ms Pawan Nawawattanasub

Ms Pawan Nawawattanasub

CEO
YLG Bullion Singapore Pte Ltd

Pawan is the CEO of YLG Bullion Singapore and founder of YLG Bullion International. She has almost 40 years of experience in the jewellery industry and established YLG in Thailand in 2003. In 2012, she brought YLG to Singapore. She sits on the Board of Directors of the Thailand Gold Traders Association, the Thailand Futures Exchange’s Arbitration Committee, and the Rotary Bangkok committee. She holds a master’s degree in Political Science.

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Mr Shaokai Fan

Head of Asia-Pacific (ex China) and Global Head of Central Banks
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Mr Alan Liew

Head of Bullion & Commodities Trading
United Overseas Bank Limited
Alan is Head of Bullion and Commodities Trading for Group Trading in Global Markets, United Overseas Bank (UOB). Alan joined UOB and started the bank’s commodities trading business in 2014, previously he spent eight years in Standard Chartered Bank (SCB) trading both precious and base metals. During his tenure at SCB, he obtained the SGE gold trader licence and was part of the pioneering team for the SGE business and the FX quantitative trading team. Prior to trading, he worked for Monetary Authority of Singapore in the Financial Risk Management Division. He holds a BSc (Hon) in Computer Science at National University of Singapore and a MSc in Financial Engineering at Nanyang Technological University.

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Mr Nikos Kavalis

Managing Director
Metals Focus Singapore Pte Ltd
Nikos Kavalis is a founding partner of Metals Focus. He has over 20 years of experience in precious metals, having previously worked for the Royal Bank of Scotland and GFMS. Since September 2019, Nikos has been based in Singapore, where he also runs the local subsidiary of Metals Focus.

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Mr Nuttapong Hirunyasiri

CEO
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Mr Raman Walia

Executive Director, Head of Commodities Sales – APAC
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Raman is Executive Director and Head of Commodities Sales, APAC, for J.P. Morgan. He joined JPMorgan in 2008 in New York, moved to Singapore in 2011, and helped expand the precious metals business in the region. Raman has an MBA from Cornell University, and likes to travel in his spare time.

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Mr Andrew Clarke

Head of Brink’s Global Services
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Mr Kazuya Naoki

Head of Metals, Asia
ICBC Standard Bank Plc, Singapore Branch

Kazuya (Kaz) Naoki is the Head of Metals, Asia of ICBC Standard Bank in Singapore and is responsible for the precious & base metals sales and trading in the region. He joined Standard Bank Plc Tokyo Branch in 2008 and was relocated to its Singapore Branch in 2013 whose controlling stake was acquired by the Industrial and Commercial Bank of China in 2015. Prior to joining Standard Bank, Kaz spent 11 years focusing on commodity trading and risk management with Mitsui & Co in Tokyo, Sydney and London. Kaz has been serving on the SBMA Management Committee since 2016.

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Mr Vinh Nguyen

Head of Precious Metals, Asia
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Vinh Nguyen joined StoneX Group in Singapore at the beginning of 2008 and responsible for its APAC precious metals activities since 2019 until now.

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Mr KL Yap

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