The ABX Settlement Process
The Allocated Bullion Exchange has, and enforces, strict settlement rules to which every exchange member must adhere to.
In the event that an exchange member fails to settle on a trade, they will be subjected to full penalties and damages to the trade counter-party and the Allocated Bullion Exchange. Failure to meet the costs incurred during a set time period will likely result in the termination of their membership of the ABX.
The cash settlement and its corresponding transfer of legal title of ownership to the bullion item(s) occurs immediately upon trade execution.
When a trade participant buys a bullion item(s) on the ABX, their cash balance shown in MetalDesk is automatically debited with the full trade value plus the associated execution fee upon order completion.
If a limit order has been placed then the corresponding value of funds will be moved from your available cash balance into a 'Reserved Funds' status, where they will remain until the order is executed or cancelled.
When a trade participant sells a bullion item(s) on the ABX, their cash balance shown in MetalDesk is automatically and immediately credited with the full trade value consideration less the associated execution fee.
The following rules apply to funds (cash) connected with the ABX clearing and settlement process:
- No client funds are received directly by the ABX. They must all go via a Full Member of the Allocated Bullion Exchange.
- Funds are transferred by a client to the Full Member, with the Member settling the trade with the ABX.
- Where the client is registered with an Associate Member, the funds will be transferred via the Full Member that is acting as sponsor to that Associate Member.
- When a client withdraws funds remittance is made by the ABX to the Full Member.
- Fees charged to Members (Full & Associate) vary by monthly volume traded (in USD or AUD terms) and metal stored at the ABX (by total USD or AUD value).
This ABX clearing and settlement system is fully processed internally to increase the efficiency, speed and cost-effectiveness of the marketplace.