Pursuant to our Organizational Charter, Strategic Gold Corporation operates according to the highest industry standards established by the London Bullion Market Association (LBMA).
Good Delivery Standards
Historically, the members of the London Bullion Market have compiled lists of accredited smelters and assayers whose gold and silver bars they would accept without question in settlement against transactions conducted between each other and with other acceptable counterparts. Such bars earned the distinction of London Good Delivery status. The LBMA Good Delivery List is now widely recognized as representing the de facto standard for the quality of gold and silver bars, in large part thanks to the stringent criteria for assaying standards and bar quality that an applicant must satisfy in order to be listed. The main requirements to be considered for listing are normally that a refiner must: 1) have an established track record of at least three years of producing the refined metal for which the listing is being sought, 2) produce a minimum quantity of refined metal per year – 10 tonnes of gold and 30 tonnes of silver, 3) have a tangible net worth of at least £10 million equivalent, 4) furnish evidence of their ownership structure and directors, 5) provide, if required, a suitable letter of endorsement, e.g., from the central bank or an acceptable commercial bank in their country of operation.
In January 2004, the LBMA introduced Proactive Monitoring of the refiners on the Approved List, an important initiative which further enhances the reputation of the List and the refiners on it. Regular monitoring of those on the List ensures that the stringent requirements for joining the List continue to be met. Physical tests are performed on receipt of bars, and also by specialist assayers who visit vaults periodically and test bars on behalf of their owners. Independent audits performed by random sampling under a double-blind arrangement ensure continuity of the Chain of Integrity standards.
Chain of Integrity
The Chain of Integrity is an essential part of the Primary Bullion Market’s infrastructure. Every bullion bar delivered into this “Chain of Integrity” was refined by an accredited bullion refiner, and stamped with its four distinguishing characteristics: 1) a unique serial number, 2) the purity or fineness of the bar, 3) the specific bar weight, and 4) the refiners mark.
Bars traded by LBMA members maintain a traceable chain of custody among trusted trading partners. The LBMA maintains a list of acceptable member refineries that meet certain membership requirements and have passed assay tests. Bullion products from these refineries will generally be accepted by other members of the LBMA at face value without further assay testing. When purchasing bullion products, the face value can generally be accepted if the product can be shown to have remained in the custody of a certified bullion repository since its manufacture by an acceptable refinery. The rules established by the LBMA allow members to trade bullion between themselves without concern as to the quality or the purity of the bars.
The LBMA has no regulatory responsibilities for the bullion market. Following regulatory changes introduced on 1 April 2013, the the Prudential Regulation Authority (PRA) at the Bank of England, now has overall responsibility for the prudential regulation of banks, building societies, credit unions, insurers and major investment firms, many of whom are active in the bullion market. The conduct of financial institutions is now overseen by the Financial Conduct Authority (FCA), which was formed from the FSA and is separate from the Bank. The FCA promotes competition but is also operates the prudential regulation of those financial services not supervised by the PRA, such as asset managers and independent financial advisers. The LBMA maintains a close working relationship with both the PRA and the FCA.
Trading in spot, forwards and wholesale deposits in the bullion market is underpinned by the Non-Investment Products (NIPs) Code which has been drawn up by participants in the UK foreign exchange, money and bullion markets. The Code can be downloaded from the Bank of England’s website here .
Corporate Best Practices
In addition to the checks and balances provided by the LBMA and the FCA, Strategic Gold Corporation receives sales confirmation documentation for every bar purchased from our LBMA member trading partners. Likewise, our LBMA vaulting facilities provide detailed inventory lists of all the bars held in storage. As a result, clients of Strategic Gold Corporation are assured that all bullion owned meet Chain of Integrity standards.