The nation’s bourse operator, the Korea Exchange, said Wednesday that it will launch a gold trading platform next Monday in an attempt to better monitor a market dominated by illegal transactions.
Last year, the country's financial authorities unveiled a plan to set up a gold trading platform in line with the government's efforts to bring the underground economy into the open and squeeze taxes out of the market where tax evasion is rampant.
According to the exchange, 1 gram units of bullion of 99.99 percent purity will be used to facilitate liquidity and delivery will be made in 1 kilogram bars.
Trading will be made from 10 a.m. to 3 p.m., and commission fees will be exempted for a year through March next year, it said.
Along with futures firms, securities firms, gold dealers, importers and wholesalers, local refiners approved by the authorities can be registered as a member of the spot gold bourse and engage in buying or selling spot gold like stocks.
They are required to deposit their gold in a depository, with buyers bidding for ownership in the depository, according to the Korea Exchange.
Retail investors will be allowed to participate in the gold exchange, but only if they trade gold through financial firms, according to the exchange. Investors are also required to pay 10 percent value-added tax when they take physical delivery of gold purchased on the exchange.
South Korean individuals hold an estimated 720 tons of gold, seven times the 104 tons kept at the central bank. South Korea's gold trading volume reaches some 100 tons on an annual basis, about 70 percent of which is believed to be illegally traded without being taxed.
Previously, the government estimated tax evasion from such illegal trade to be close to 330 billion won ($311 million). (Yonhap)