Spot Deferred Settlement and Unallocated Physical Metal Trading

Unallocated Trading Account

Most traded and settled bullion in London is on an unallocated account basis. This is an account where the customer does not own specific bars, but has a general entitlement to an amount of metal. This is similar to the way that a bank account operates: in that a customer may not necessarily receive the same notes they originally deposited. Similarly, a customer with an unallocated account who physically withdraws their metal will not necessarily receive the same gold bars back they deposited. It is the most convenient, cheapest and most commonly used method of holding metal.

The units of these accounts are one fine ounce of gold and one ounce of silver, based upon a 995 LGD gold bar and a 999 fine LGD silver bar respectively. Transactions may be settled by credits or debits to the account, with the balance representing the indebtedness between the two parties. Credit balances on the account do not entitle the creditor to specific bars of gold or silver. Instead the balance is backed by the bullion stock of the dealer with whom the account is held. The client is an unsecured creditor.

If a client wants to have actual metal, specific bars or equivalent bullion product are ‘allocated’, the fine gold content of which is then debited from the unallocated account. The market convention is that bullion may be allocated on the day it is called for, with physical metal generally available for collection on the next business day.

Spot Deferral

EVR Bullion clients are provided the opportunity to purchase physical precious metal commodities on a spot deferred unallocated settlement basis.

Example

The product, enabled through the strong relationships EVR has with its trading partners and their relationships with large market institutions, enables clients to place a deposit on their account, and purchase up to 5 times the amount they have deposited on account. I.e. £20,000 deposited will enable a transaction with a security value of £100,000 to be executed*