The Chinese Gold and Silver Exchange Society is considering a switch to electronic trading and an extension of its business hours. Newly elected president Fung Chi-kin said the exchange might also expand its product line to include London gold trading. In addition, it proposed a plan to the Government that would enable Hong Kong to become the main regional gold entrepot, he said. Mr Fung announced the proposals after his election to the top position on the exchange yesterday. Mr Fung represents the financial industry - including the stock, futures and gold markets - in the Legislative Council. He has been a member of the ruling body of the gold exchange for nearly 10 years. 'We want to attract both retail and institutional investors to trade in the gold exchange,' he said, pointing out that the 190 gold dealer members of the exchange had reacted positively to the proposals. After the futures exchange last week replaced open outcry with electronic trading, it meant that the Chinese Gold and Silver Exchange Society was the only one left with open-outcry. Open outcry sees traders on the floor calling out orders as they conduct the trading process. Mr Fung said the exchange would like to retain some elements of open outcry because it was part of the traditions of the exchange. 'We would like to adopt a combination model that would still use the open outcry during normal trading on the exchange, but would also introduce electronic trading for extended trading after the floor is closed,' he said. The exchange would like to extend its trading hours to match those in the United States and Britain. However, it has not decided on the extended trading period. Mr Fung said it might need to be about 2 am to 3 am to match the early trading hours of the US market, instead of the present 4 pm close. Another proposal is to bring local London gold trading to the exchange. Local London gold is at present traded mainly through banks. 'If local London gold is trading on the exchange, it would increase the transparency of the market,' Mr Fung said. The exchange's only product is local gold, traded in taels using Hong Kong dollar. The traders are mainly gold and jewellery manufacturers who usually require the settlement in gold. Local London gold, by contrast, is traded mainly by bankers or retail investors who would settle in cash rather than gold. It trades by the ounce in US dollars. 'We see retail investors having a great interest in trading local London gold,' Mr Fung said. 'Introducing local London gold trading on the exchange would increase retail participation.' Talks with government officials on enhancing the SAR's position as a gold entrepot would include asking for a reduction or waiver on the 0.025 of a per cent declaration fee for gold warehousing. In addition, the exchange would propose to the Government that a warehouse be built near the airport to store the gold before it is transferred elsewhere. 'In Singapore and Malaysia, they do not charge anything for the entrepot of gold,' Mr Fung said. 'Hong Kong would need to cut down cost to attract gold traders to use Hong Kong as an entrepot.' It was likely that once the mainland was a member of the World Trade Organisation, it would relax its rules on importation of gold. Such a situation would be an ideal opportunity for Hong Kong to increase its role in the trade and make itself a gold entrepot for the region, Mr Fung said.