Frequently Asked Questions

 

Investing in bullion through the ABX

How do you buy or sell bullion through the ABX?

Investors can only buy bullion through a listed Member of the ABX.

About the ABX, its operations and business model

What is the ABX?

The Australian Bullion Exchange (ABX) is Australia’s first physical bullion exchange, much like the ASX is an exchange for equities. The ABX connects buyers with sellers of precious metals.

The ABX will create a large liquid market that, up until now has not existed.

The ABX is an Australian domiciled over-the-counter (OTC) spot market for investment grade physical bullion. The Exchange is a principal-to-principal market formed through a member structure of finance and bullion industry participants.

The Exchange is a level playing field that connects the bullion industry to the finance/investment industry, promoting fairness, efficiency and competition.

The ABX also offers custodial services for investors who do not want to store their physical bullion.

The ABX is based on other international metal exchanges using best practise systems and technology to create a robust and reliable investment platform.

What is the opportunity for Members?

There are six categories of members: floor members; full members; associate members; institutional members; industry members; and research members. All but the industry and research members have the right to trade on the ABX.

Broadly, the opportunity for Members are the benefits associated with gaining direct access to a centralised physical bullion exchange that provides leading holistic trading and storage facilitation.

For Broker Members: they can offer a simple, secure and highly accessible holistic physical bullion brokerage service to their private clients.

For Institutional Members: they can directly trade and store bullion through the Exchange’s leading facilities.

For Research Members: they can publish research and analysis through chanels that connect with the ABX’s investors and other stakeholders.

What is the opportunity for retail investors?

The overarching opportunity for retail investors is being able to holistically invest in allocated physical bullion bars and coins in a quality assured environment that is simple, secure, cost-effective and highly accessible.

The ABX is an end-to-end solution for investors looking for short, medium and long-term investment into precious metal bullion.

The ABX is a central marketplace where retail investors can quickly research and find suitable service providers.

How is the price set?

The market will be priced on the ABX Australian spot price for gold, silver and platinum bullion in nine different currencies. This price is set by demand and supply forces for Australian bullion. The ABX will also set a Fix Price at 10:30am and 3pm each business day via a teleconference with five elected Members of the Exchange.

Why are you launching this now?

The ABX will establish a long-overdue efficient and globally recognised OTC bullion market in Australia. With the renaissance of the physical bullion investment market underway, a central exchange is critical to provide a fair and efficient marketplace for all participants.

Australia is the second largest gold producer in the world, with the strong possibility of becoming the largest in coming years. Accordingly, we should have a globally recognised bullion exchange.
 
There are currently limited options available to the finance industry for holistic turn-key physical bullion investment facilitation in Australia. The ABX’s broker support service to the finance industry will further promote competition within the physical bullion industry bringing additional quality and pricing benefits to the retail investor.

How do you make profits?

Profits are derived from fees we charge members for exchange trading and storage services.

These fees are some of the lowest in the industry and directly comparable with Bullion ETFs.

Tell me about the storage facilities?

We are of the view that our storage facilities are the most secure in Australia.

ABX utilises a vault facility that is rated by the Lloyd’s of London insurance syndicate as the most secure in Australia.

ABX has a facility within this facility called ASVA – ABX Secure Vault Area. Essentially, a vault within a vault.

Bullion is held in an allocated and segregated account for each investor, meaning absolute title is always held on specific bullion bars/coins that are additionally segregated from all other investor bullion holdings within the vault. Allocated and segregated storage is unquestionably the safest form of bullion storage.

How does investing in gold through ABX compare with investing in gold through bullion traders?

The ABX offers investors a principal-to-principal exchange, meaning only The ABX’s members can directly trade on the exchange, with transparency of pricing being set on the real-time Loco Australia spot price for gold, silver and platinum bullion in nine different currencies.

The ABX also offers a holistic investment solution including buying, selling, storage, insurance and transport.

How much does it cost to invest in bullion through ABX? What commissions are payable?

At a retail investor level, this is by negotiation with the private investor’s ABX listed Bullion Broker.

Management and Corporate Structure

Who is behind the ABX? Who are the directors and management?

There has been a coordinated effort across Finance, Bullion, Accounting and Law firms to bring the ABX to market.

The Board of Directors currently constitutes: Thomas Coughlin (and CEO); Michael Coughlin; and David Charles.

These board members have strong professional experience across finance, accounting and law.

A decision was made to purposely leave the Board of Directors at a bare minimum during the inception phase to accommodate up to 10 positions being filled by Floor Members that join the ABX.

Security

What security arrangements do you have in place?

Security is of paramount importance to the successful operation of ABX. At every turn there is a long list of professionally compiled security protocol.

Our Quality Assurance Framework encompasses the whole business: exchange trading and all operating technology infrastructure; and the storage and delivery of the physical bullion.

Do ABX employees have access to the vault?

No.

ASVA (ABX Secure Vault Area) requires simultaneous triple biometric fingerprint and manual key entry by: 1) the vault operator; 2) Inspectorate; and 3) ABX.

So, no one person or organisation has access to the ABX Secure Vault Area (ASVA). ASVA is located within an existing commercial vault two levels underground.

In the world that we live in, we thought it necessary to be excessive with separating vault access.

The specific individuals from these organisations who are part of this process are highly confidential and change regularly, for obvious security reasons.

Misc

Are financial planners paid a commission for recommending clients invest in ABX?

Members of the exchange, including financial planners are not paid anything by the ABX.

Just like a stockbroker chargers brokerage for client stock trades, ABX Listed Brokers have the right to charge their clients a brokerage fee. This fee is a matter between the Broker and their client.