The professional principles upheld by the World Gold Council contribute to the growth of trust in the retail gold market around the world. They provide gold providers with a comprehensive list of best practices as well as a road map for putting those practices into action.

The retail gold industry is a lucrative and international market

Forget the archaic image of a few enthusiasts hiding gold in their home safes to keep it for themselves. Gold is traded on a global scale, with private investors holding approximately 45,000 tons of the precious metal in the form of bars and coins. This represents approximately 22% of all of the gold that has ever been mined.

In point of fact, the demand for bars and coins accounts for twenty-five percent of the world’s annual demand for gold, which equals more than one thousand tons of retail gold investment each year.

However, ownership of gold has long since moved beyond the requirement for the commodity to be physically stored. This applies to gold collectibles as well as bars and coins.

A growing number of investors now hold their gold in the form of digital tokens on a Blockchain, also known as tokenized gold. You can also purchase digital gold through an app or website, and it will be stored in a vault on the investor’s behalf.

Even though there are no regulations governing the retail gold market, it is still possible to navigate it safely with the right guidance. Because of this, the World Gold Council came up with the Retail Gold Investment Principles in order to encourage trust in this expansive and high-value market.

The Principles Applied by Providers

The Retail Gold Investment Principles (RGIPs) were developed by the World Gold Council after they consulted with 52 different industry stakeholders from 16 different countries.

The principles provide providers of all different kinds of gold products with a set of best practices to follow, and we are working with the industry to develop methods by which sellers can demonstrate that they adhere to the principles.

Gold suppliers also reap benefits when they collaborate with self-assured investors who place their faith in a gold market that is governed by stringent guidelines.

Principle 1: Fairness and integrity

From the provision of information and services all the way through to the conclusion of the transaction, a provider is obligated to treat their customers fairly and act with integrity.

Principle 2: Transparency

A provider is required to disclose all material information, including prices, key terms, and any additional pertinent information related to product features.

Principle 3: Protection of client assets

A provider has an obligation to provide customers with an adequate level of protection for their gold holdings and any other assets, including cash, that are held on their behalf.

Principle 4: Responsible gold sourcing

In addition to taking into account Environmental, Social, and Governance (ESG) standards, a provider is required to procure gold of the highest possible integrity from reliable suppliers.

Principle 5: Regulatory compliance

A provider is obligated to comply with all of the relevant regulations and local laws.

Principle 6: Commercial prudence

A provider must avoid taking unnecessary risks and should be ready for a variety of contingencies, including the possibility that their business will be wound down.

Principle 7: Operational professionalism

A provider is required to manage key risks and conduct their business with the appropriate level of expertise, care, and diligence.

Get the Retail Gold Investment Principles in Full

In the absence of standard operating procedures for your sector, it may be difficult to establish your company’s credibility even if you are successful in luring investors to your company.

Our Retail Gold Investment Principles are an important tool that helps sellers demonstrate that they adhere to standards that have been outlined by the World Gold Council as necessary for conducting business.

Our Retail Gold Investor Guidance

In addition, the World Gold Council assists retail investors in selecting the most appropriate gold product for their needs and in locating reputable suppliers.

The Retail Gold Investor Guidance that we provide suggests to investors that they should only make purchases from vendors who exhibit the behaviors that are outlined in our RGIPs.

The Retail Gold Investor Guidance is vitally important for credible sellers as well, as it assists them in better aligning themselves with the expectations of today’s educated investor.

The link that can be found at the bottom of this page will take you to information about our Investor Guidance.

Providing direction to investors with the goal of bringing about positive change worldwide

The World Gold Council released the Investor Guidance alongside the Retail Gold Investment Principles in August of 2020, but this was just the beginning of their efforts to benefit retail investors as well as industry practitioners.

Since they were first published, the guides produced by the World Gold Council have had an effect felt all over the world. The investor guidance and provider principles are now available in significant markets such as India, China, Singapore, Germany, and the United States of America.

To this day, the World Gold Council engages providers and stakeholders all over the world in an effort to actively encourage adherence to the Retail Gold Investment Principles.

We are;

• Adjusting the guiding principles and guidelines so that they are in line with the needs of the regional market.
• Creating collaborative efforts across sectors of the industry
• Evaluating the various ways in which service providers can independently demonstrate that they adhere to the principles, as well as other considerations

World Gold Council Launches Retail Gold Investment Principles

The Retail Gold Investment Principles were just released today by the World Gold Council, which is a market development organization for the gold industry (RGIPs). These Principles are intended to serve as a guide for product suppliers operating in the retail gold market on a global scale and to further encourage retail investors to place their faith in gold.

The adoption of the RGIPs will ensure the highest levels of fairness, transparency, and integrity are instilled throughout the market. The RGIPs will provide high-level, best practice principles for providers of all different kinds of retail gold investment products. These principles will be provided by the RGIPs. It is anticipated that the implementation of best practises will result in an increase in trust, which will be to the advantage of customers as well as product providers, resulting in value creation and increased demand throughout the sector.

The World Gold Council held an open consultation as part of the process of drafting the Principles. The purpose of the consultation was to solicit feedback from product providers across the industry. The structure and terminology of the RGIPs were reviewed by industry professionals from over fifteen different countries representing all aspects of the retail gold investment market. Their input was extremely helpful.

The World Gold Council is publishing today an updated set of investor guidance, which is known as the Retail Gold Investment Investor Guidance. This is being done to provide support for retail investors and to provide them with the knowledge and understanding they need regarding gold investments. This has been expanded to educate investors further on the variety of investment models available for retail gold products. It also includes a summary of the RGIPs and what these should mean from the point of view of an investor. In addition to this, it makes investors aware of the existence of cons and fraudulent practices on the market, as well as provides guidance on how to spot them and protect themselves.

“We have taken the time over the past year to engage with a wide range of industry stakeholders representing different global regions and a diverse range of business models to understand how we can best support the retail gold investment industry,” said David Tait, CEO of the World Gold Council. Our overall goal is straightforward: to ensure that investors, particularly those who are thinking about investing in gold for the very first time, have complete faith in both the products they are offered and the service providers with whom they choose to conduct business.

As a result of this industry engagement, it became abundantly clear to us that the market would benefit from a globally aligned set of best practices in order to ensure an effective, efficient, and trusted market as a whole, and we believe that the Principles do exactly that.

The publication of the Principles and the accompanying implementation guidance marks the beginning of a multiyear, in-depth engagement with the industry, which will take place region by region. The goal of this engagement is to define, in the most effective manner possible, how the Principles can be adopted and implemented while also taking into account the requirements of the local market.

Promoting industry-wide adoption of best practices among gold providers.

These Retail Gold Investment Principles are intended to raise the bar for product providers across the market and encourage retail investors to place their trust in gold, thereby creating value and driving demand across the industry. In addition, these Retail Gold Investment Principles are designed to raise the bar for product providers across the market.

PRINCIPLE #1

Fairness and integrity

• Customers should be made aware of offers in a way that is transparent and fair, and this can be done by representing key product characteristics, including potential risks and safeguards. Avoid putting undue pressure on your customers or engaging in any kind of manipulation.

Give information that is not subjective:

• When creating marketing materials or conducting product promotions, make sure to provide information that is both accurate and transparent regarding the most important aspects of the product.
• Don’t lie about your own products or the products of your competitors.
• When comparing the offerings to other products, present them in a way that is fair and balanced.

Disclosing all pertinent information includes:

• Do not hide, gloss over, or otherwise misrepresent the primary dangers.
• Make certain that you reveal the primary legal parameters that are associated with the offering.

Do not pressurize investors:

• Always avoid using pushy sales techniques and inciting unnecessary fear in potential customers.
  • Education and support

Make sure to provide your customers with any pertinent education or training they may need regarding your products or platforms, as well as general information regarding gold as an asset class. Maintain accessibility for your customers and provide assistance when it’s required.

Offer training to your customers:

• You should provide investors with educational material on gold as an asset class or point them in the direction of other credible information sources.
• Provide prospective clients with information via online tutorials and frequently asked questions sections on subjects like how to buy and sell gold.

Make sure there are staff members available:

• At the very least, you should make sure that customers can contact the customer support staff via email and phone during normal business hours.
  • Fair pricing and fees

Make sure your prices are reasonable, and check that your fees are accurate. Make sure to give your customers all of the information they need to fully comprehend and evaluate the prices they’re being charged.

Fee types:

• Make sure that the types of fees you charge and the costs that are levied are equitable and in line with the practices that are common in the local market.
• Treat all of your customers in the same manner; that is, do not discriminate against any of your customers for any reason, such as the level of market knowledge they possess.

Price type

• Be sure that your prices are reasonable and in line with what the local market is charging for products or services that are comparable to what you’re offering.

Disclosure:

• Traders should make the prices and times of their executed trades public.
• Customers should be given sufficient information to enable them to compute the overall premium that will be added to the base price of gold that they will be required to pay.
  • Fair trading and settlement

Customers’ liquidity and price needs should take priority. Maintain clarity regarding the completion of the transaction, the settlement times, and the terms. Reduce the associated risks that customers face.

Counterparties and trading prices:

• Optimum levels of liquidity and competitive pricing should be achieved for investors through strategies such as conducting business with a large number of different suppliers.

Settlement time and risk:

• Investors should be provided with clear information regarding settlement times and terms, such as whether positions can be closed prior to the final settlement and what will happen if a transaction fails to go through or is cancelled.
• Reduce the potential for settlement risks as much as possible, for example by making sure that the operating models have been configured and reviewed correctly.

PRINCIPLE #2

Transparency

A provider is required to disclose all material information, including prices, key terms, and any additional pertinent information related to product features.

2.1. Fees and terms transparency

Customers will be able to make more educated decisions about their investments if they are provided with unambiguous information regarding fees, terms, and conditions. Components of fees, starting prices, purchase prices, and investor rights should all be included in the information.

A provider is required to disclose all material information, including prices, key terms, and any additional pertinent information related to product features.

Be transparent about your fees:

• Before investors make any decisions regarding their investments, you should make sure that all fee schedules and other costs are disclosed to them in a clear and understandable manner. In most cases, these will consist of transaction fees as well as other items, such as fees for delivery or storage.
• Totally divulge any additional costs associated with the operation, such as those for the delivery of gold.
• Investors should be informed of any applicable basis prices, the purchase price, the date and time of the transaction, and any other relevant information.

Be open and honest about the following terms:

• Make sure that prospective customers and investors have access to the important terms and conditions.
• Include information on the rights of the customer and make reference, within the disclosed terms, to any applicable fees and other costs.

Notify customers of any changes to the terms or fees:

• Inform the customers of any changes that may have been made to the fee schedule, costs, or terms and conditions.

2.2. Disclosure

Customers, prospective customers, and other stakeholders, such as service providers, should be informed of pertinent company information. Please describe the kind of organization that you are. Include pertinent information about key personnel and emphasize important aspects of safety, where appropriate.

Share important information with all of the relevant parties:

• You are obligated to share crucial information not only with your clients or potential clients, but also with other stakeholders, such as regulatory bodies and tax authorities, in accordance with the laws and regulations that are applicable in your area.

You need to include the following in your response:

• The law that governs the company’s operations, the company’s name, legal structure, and registration number, as well as information on the company’s key personnel, including any relevant experience in the gold market.

# PRINCIPLE #3

Protection of Client assets

A provider has an obligation to provide customers with an adequate level of protection for their gold holdings and any other assets, including cash, that are held on their behalf.

3.1. Safekeeping of client assets

Ensure the safety of any assets that are being held on behalf of customers. This pertains to gold that has been purchased for investment purposes but has not yet been collected or delivered. It is applicable to gold that is in the process of being shipped to customers. In addition, it applies to cash that is held for customers before, during, or after the transaction of buying or selling gold.

A provider has an obligation to provide customers with an adequate level of protection for their gold holdings and any other assets, including cash that is held on their behalf.

Maintain the safety of client property:

Protect the assets of your customers while you hold them on their behalf. This may involve gold that is held in custody for your customer over a short or long period of time, as well as cash that is held on their behalf prior to the final settlement of a transaction.

Put in place the necessary operational measures:

• In order to protect the assets of your customers from being misappropriated, defrauded, or lost due to normal business operations, you should establish adequate operational procedures such as access controls or record-keeping.

Ensure that ownership rights are protected:

• Make the necessary preparations to protect the ownership rights of your clients over all of their assets, for example in the event that the company they do business with goes bankrupt.

3.2. Insurance

In order to protect your customers both directly and indirectly, you need to make sure that your business operations and gold holdings are adequately insured. When it comes to the protection of client assets, such as gold or cash, this is especially important to keep in mind. It is essential to obtain insurance so that you can settle any claims that may be made against you.

Ensure that the gold you are responsible for is insured:

• Ensure that all gold holdings are adequately covered by insurance against loss, damage, and theft.

Confirm the insurance for logistics:

• You, as the provider, or the logistics company should make sure that the gold that is being shipped to your customers is adequately insured while it is in transit.

Protect the functioning of your company by doing the following:

• Get the appropriate general insurance policies, such as liability cover, and make sure to keep them up to date.
• If necessary, you should look into purchasing additional insurance coverage, such as protection against cyber attacks.

PRINCIPLE #4

Responsible Gold sourcing

In addition to taking into account Environmental, Social, and Governance (ESG) standards, a provider is required to procure gold of the highest possible integrity from reliable suppliers.

4.1. High-integrity gold

Purchase and sell only genuine, high-quality products, the authenticity of which can be independently verified by customers or other relevant stakeholders.

In addition to taking into account Environmental, Social, and Governance (ESG) standards, a provider is required to procure gold of the highest possible integrity from reliable suppliers.

Transactions involving gold products with a high level of integrity:

• Purchase and sell gold products that meet the industry standards for their particular product category, such as those relating to the level of purity they contain.
• Provide information about the most important aspects of a product, such as its weight, purity, and manufacturer (for example, the mint or the refiner).

Verify the following authenticity marks:

• If you want to prove that a product is genuine, you should provide assay proofs, certificates of authenticity, or packaging that cannot be opened.

4.2. Trustworthy suppliers

Ensure that gold suppliers have genuine integrity and can be trusted at all times by conducting due diligence on them and continuing to monitor them on an ongoing basis.

Obtain gold from reputable distributors:

• You need to make sure that you are sourcing from reputable and/or accredited suppliers by conducting initial due diligence on all of your suppliers.
• When possible, obtain gold from suppliers and their upstream partners who abide by responsible gold standards. These standards could include the “Responsible Gold Mining Principles” published by the World Gold Council, the “Responsible Gold Guidance” published by the London Bullion Market Association (LBMA), or the “Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas” published by the Organization for Economic Co-operation and Development (OECD)

Maintain a consistent monitoring schedule for:

• Maintain a vigilant watch over the vendors from which you source products as well as the products themselves in order to identify any unfavorable shifts.

Maintain a record of:

• Keep accurate records of your suppliers, the products you source, and the due diligence you perform.

Employ a chain of integrity as follows:

• Gain access to recognized chains of integrity, such as the one offered by the LBMA, and, whenever it is feasible to do so, utilize the LBMA’s members, which include refiners, smelters, vaults, and security carriers.

4.3. Environmental, Social and Governance criteria

Examine the Environmental, Social, and Governance (ESG) credentials of both the products and the suppliers in accordance with the standards that have been established for ESG.

Include environmental, social, and governance (ESG) criteria in your business operations:

• You should run your company in a way that shows consideration for the natural world, such as by minimizing the production of waste and pollution and the amount of energy you use.
• Be kind to your workers and considerate of the concerns of other stakeholders, such as your business partners and the general public.
• Maintain good corporate governance practices by adhering to the following guidelines: organization, transparency, and internal controls.
• Make a public pledge to adhere to applicable ESG standards, such as those developed by the World Gold Council, the London Bullion Market Association, or the Responsible Jewelry Council.

Collaborate in business with partners who share your values:

• Align yourself with business partners who are already committed to environmental, social, and governance (ESG) standards, or encourage them to meet these standards in the future, in order to establish responsible practices throughout the entirety of the supply chain.

PRINCIPLE #5

Regulatory compliance

A provider must adhere to all applicable regulations and local laws.

5.1 Know Your Customer and Anti-Money Laundering controls

Maintain compliance with international as well as local regulations by looking out for, uncovering, and reporting any instances of money laundering. Put in place effective controls and compliance functions. Record information about customers and maintain those records, as necessary. A provider is obligated to comply with all of the relevant regulations and local laws.

Prevent, identify, and report activities that involve money laundering:

• You need to make sure that you comply with all of the relevant regulations, such as those pertaining to anti-money laundering (AML), customer due diligence (CDD), know your customer (KYC), and anti-terrorism financing (ATF) (ATF).
• You are also obligated to comply with any relevant local regulations.

Observe the following rules and guidelines:

• Create an anti-money laundering programme and a compliance function.
• Create and keep up-to-date accurate names, records, and accounts of your customers, as well as appropriate recordkeeping controls.
• Please notify the appropriate authorities about any suspicious activities. You are required to turn away restricted investors and to place high-risk investors under additional CDD scrutiny.

Provide transparency:

• Maintain transparency regarding the CDD level that is being utilized.

5.2 Adherence to regulations and local laws

Ensure compliance with any additional regulations and laws that may be applicable in any and all of the markets that you serve, including those pertaining to consumer protection, taxation, regulation of financial services, and document compliance procedures.

You must comply with all laws and regulations, including those that are applicable and mandatory:

• Anti-money laundering and similar regulations financial services regulations taxation for example value-added tax (VAT) or goods and services tax (GST) privacy regulations consumer protection laws

You should ensure that you are in compliance with all laws and regulations that are applicable:

• In the markets in which you operate, which are also the locations of your existing customers and potential customers.

Maintain records of compliance:

• It is important to document all compliance procedures, both for internal purposes and for any legitimate requests made by third parties, such as government regulators, business partners, or financial institutions.

Commit to the implementation of voluntary standards:

• When appropriate, you should think about applying voluntary standards such as the Global Precious Metals Code developed by the LBMA.

PRINCIPLE #6

Commercial prudence

6.1. Adequate financial resources

• Always keep an eye on your financial situation and make sure you have enough resources to cover any potential liabilities, especially claims from customers. It is important that resources have safety buffers in case something unexpected happens.
• A provider must avoid taking unnecessary risks and should be ready for a variety of contingencies, including the possibility that their business will be wound down.

Maintain adequate liquid and capital resources:

• Maintain the company’s liquidity in such a way that it is able to pay off all of its obligations as they come due.
• Be ready to cover the financial requirements that result from unplanned occurrences; this could include significant fluctuations in the exchange rate or changes in the price of gold.

Ensure that there is a steady supply of adequate resources:

• Determine and control any potential financial risks by putting in place the appropriate management systems and controls for both liquidity and risk.
• Always make sure you have a sufficient financial cushion to cover any risks that your company decides to take.

6.2. Limited risk-taking

Limit risks, such as those that can arise from unhedged gold stock positions or foreign exchange holdings, so that even in the face of unfavorable conditions, the assets and claims of customers and the continued operation of the business are not at risk of being jeopardized.

Learn how much you can tolerate risk:

• Reduce the direct financial risks that your company faces that could potentially create indirect risks for your customers, such as if the company’s operations had to be halted for some reason.

Limit your risk- taking:

• Establish internal risk limits in relation to market risks, such as trading positions in gold, currencies, or derivatives, which may pose a threat to the liquidity of your company.
• Ensure compliance with risk limits by putting in place a system that monitors risk limits.

6.3. Wind-down planning

Be ready for a variety of possible wind-down scenarios, such as an involuntary exit from the market or the collapse of the company. The primary goal is to either completely avoid or significantly reduce any adverse effects on the customers.

Prepare yourself for a variety of possible wind-down scenarios, which may include the following:

• Market exit as a result of a strategic decision (also known as a voluntary wind-down) market exit, which occurs when a company is no longer viable as a result of poor financial performance in the market
• Market exit refers to the situation in which a business ceases to exist because of factors such as fraud, theft, or significant operational errors or failures.

Reduce the extent of any negative effects:

• Determine the critical metrics (such as potential thresholds) and early warning signs that need to be tracked on a consistent basis so that you can make timely decisions regarding the wind-down process.
• If possible, schedule a desired or required market exit so that there are adequate resources for an orderly wind-down. This typically applies to the first two scenarios above.
• Determine any potential adverse effects that could result from the winding down of operations and make plans to address them. Special consideration should be given to returning any gold or cash held on behalf of customers.

Prepare yourself for any and all outcomes:

• Assign responsibilities surrounding issues such as the approval of a wind-down plan or planning for its implementation.
• Define the necessary actions for a wind-down in each of the scenarios (or recovery where feasible).
• Determine which resources will be needed for any wind-down, such as human resources, financial resources, information technology systems or outsourced services, information that can be retrieved on customer gold holdings and customer monies.

PRINCIPLE #7

Operational professionalism

7.1 Sound risk management

Determine which risks are most significant for the company and the people it serves, then develop strategies to mitigate those risks on an ongoing basis. Put into effect the necessary precautions to reduce the risk.

A provider is required to manage key risks and conduct their business with the appropriate level of expertise, care, and diligence.

• Determine and quantify the most important risks facing both your company and your clients, including financial risks (such as settlement risks and counterparty risks) and operational risks (risks arising from errors or fraud)
• Legal and regulatory compliance dangers

Install controls within the organization:

• Continued monitoring and management of the most significant risks should be carried out, possibly through the establishment of a risk register and the performance of periodic risk assessments and/or reviews of compliance with policies.
• You need to put risk governance structures in place, with key risks being regularly discussed at board meetings according to a set schedule.

Minimize your risks:

• Establish controls for operational risk by addressing responsibilities, policies, processes, and procedures, in addition to information technology systems.
• Implement the “separation of duties” and “four eyes” principles, which stipulate that certain tasks can only be finished by two individuals working independently. This assists in the prevention or mitigation of significant operational errors as well as fraud.
• It is imperative that the “separation of duties” and “four eyes” principles be adhered to at all times when dealing with high-risk activities such as the transfer of funds and the delivery of goods.

7.2 Physical security

Ensure that the assets have sufficient physical protection. This encompasses the physical protection of IT infrastructure as well as the safeguarding of sensitive information, such as customer data, in addition to the storage of valuables in a secure location.

Ensure that there is an adequate level of physical security for:

• Employees of your company customers who come to your office valuables such as gold or cash held by your company or on behalf of your customers sensitive infrastructure such as customer data and information technology systems your office visitors’ personal information

Make preparations in order to avoid the following:

• Break-ins at your company’s offices or at storage facilities unauthorized access and harm done by employees, for example, misappropriation of assets or access to customer data robberies at your offices or during deliveries break-ins at your company’s offices or at storage facilities

Put in place some preventative measures:

• Install safeguards against break-ins and robberies of a physical nature, such as locks and security doors or windows.
• Install alarm systems.
• Through access controls and monitoring, you can restrict access to employees who are not authorized to have it.

Consider the Case for Gold Investing at the Retail Level

If you are a supplier of gold products, adhering to our detailed principles offers you the opportunity to demonstrate to potential investors that you run a legitimate company.

Thinking about making an investment? It is easy and risk-free to purchase gold as long as you consult with investment professionals and pose the appropriate inquiries.

Please visit our website devoted to the retail gold investment market and;

• In our Retail Gold Investment Principles document, we provide in-depth information that is specifically catered to providers.
• Invest in gold without risk using our resource, “Retail Gold Investment: Investor Guidance.”
• Check out our Frequently Asked Questions, along with other content!