The Chinese Gold & Silver Exchange Society accepted its first overseas member in its 103-year history yesterday as part of its plan to go international.
The local gold exchange welcomed Swiss firm Finemetal Asia, which distributes precious metals products made by Swiss refiner Argor-Heraeus.
Exchange president Haywood Cheung Tak-hay said yesterday he planned to recruit four more overseas members, from London or elsewhere in Europe, by the end of the first quarter of next year.
Cheung said internationalising the exchange's membership would better equip Hong Kong to compete with Shanghai, where the central government plans to establish a free-trade zone that will offer freer yuan convertibility and other incentives to attract overseas firms.
"There will be competition between Shanghai and Hong Kong, but Hong Kong has the advantage as we have a longer history as a free market," he said. "What we need to do is to improve our facilities and services for overseas firms.
"Many international metal companies want to tap the mainland market in light of increasing demand for gold and silver from Chinese consumers. The Chinese Gold & Silver Exchange Society has operated for more than 100 years and is one the world's most traded gold markets with physical gold delivery. Our exchange is the best platform for international gold firms to develop in the mainland market."
Finemetal is the exchange's 173rd active member. Its other members are Hong Kong gold-trading firms serving local jewellery makers and gold investors.
Cheung said the exchange would only accept overseas members that were well established and had the capacity to deliver high-quality physical gold or silver.
"A major criteria for these overseas members is to commit to being able to deliver a certain amount of physical gold and silver every day on customers' requests," he said.
Padraig Seif, the chief operating officer of Finemetal, said joining the exchange "marks the first step in our eastward expansion".