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| Gold jewelery at the Bao Tin Manh Hai gold company__Photo: VNA |
The State Bank of Vietnam has finalized and submitted to the Government a draft decree revising Decree 24/2012/ND-CP on the management of gold business activities. Prior to this submission, relevant ministries, credit institutions, and enterprises had contributed numerous comments to the draft, focusing on reforming the regulatory framework to develop a transparent, competitive, and development-oriented gold market.
Licensing mechanism for gold bullion production
Under the new draft, entities seeking a license to produce gold bullions must meet four mandatory conditions: (i) possessing a valid license to trade in gold bullion; (ii) having a minimum charter capital of VND 1,000 billion for enterprises and VND 50,000 billion for commercial banks; (iii) having never committed administrative violations in gold trading, or having rectified these violations; and (iv) having an internal process for gold bullion production.
Among these conditions, the proposed capital thresholds have sparked considerable debate. The Ministry of Industry and Trade requested clarification on the rationale for setting the capital requirements at VND 1,000 billion and VND 50,000 billion and questioned whether such thresholds might unintentionally restrict market participation. The Ministry of Public Security suggested that a comprehensive assessment of current capital levels be conducted to ensure the regulation aligns with market realities.
From the business perspective, Bao Tin Manh Hai proposed that the licensing criteria should also include indicators of operational efficiency and the breadth of the distribution network, to ensure that licensed entities possess not only financial strength and effective business performance but also a well-managed, proactive distribution system.
Meanwhile, other stakeholders sought clarification on the definition of “gold bullion production,” particularly whether licensed entities may outsource or delegate the production to others while still retaining full responsibility for the final output. Some also proposed that licensed entities be permitted to contract bullion production with foreign partners.
Representatives from DOJI and SJC emphasized that, given the nature of gold production activities, license holders should be required to meet facility standards such as dedicated production sites, appropriate equipment, machinery, and technical tools essential for gold bullion manufacturing.
Regarding technical standards, banks including HDBank, VietinBank, BIDV, and Techcombank proposed the establishment of an independent center for gold quality inspection, along grant of permission for participation of third-party evaluators to verify bullion weight and purity. They also recommended that the State issue a unified set of technical standards and official inspection guidelines to ensure consistency and transparency in the sector.
Expanding financial instruments and the scope of gold trading
Among the most prominent proposals from credit institutions and businesses is the expansion of financial products and instruments linked to gold trading. Several stakeholders have called on the State Bank of Vietnam to establish a legal framework for instruments such as gold futures, gold certificates, and derivatives, including forwards, swaps, and futures, applicable to both physical gold and gold accounts connected to international markets. In particular, those licensed to import gold bullion or raw gold should be permitted to purchase gold on a forward basis from abroad.
The PNJ Group proposed allowing enterprises to import raw gold for the production of jewelry and fine arts, and called for an expansion of eligibility for importing raw or bullion gold beyond the currently licensed credit institutions.
Meanwhile, Agribank and BIDV recommended the establishment of a legal framework for the issuance of Gold Ownership Certificates or Gold Bearer Instruments, enabling clients to conduct transactions without taking physical delivery of gold at the time of signing.
Stricter price management and risk mitigation mechanisms
With a view to enhancing market transparency and preventing price manipulation, the Ministry of Public Security proposed adding regulations to cap the maximum spread between gold bullion buying and selling prices. The ministry underscored the importance of requiring businesses to adopt clear and consistent pricing procedures, and to keep comprehensive records and data related to their price setting practices. It suggested the establishment of mechanisms empowering state authorities to intervene in the gold market when necessary, including mechanisms for intervening in the selling and buying prices and the supply-demand of gold bullions.
The ministry also proposed allowing units that import, produce or distribute gold bullions to manage their gold positions by balancing physical holdings with account-based gold, setting daily gold prices, or using derivatives to hedge against foreign exchange fluctuations and international gold price volatility.- (VLLF)
