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Derivative brokerage firm starts gold trading

Derivative brokerage firm starts gold trading

Alpha Gold Futures, a new local derivative brokerage firm, officially launched operations yesterday, joining in on Cambodia’s young but growing regulated derivative trading market after it received a licence late last month.

Speaking at the launch ceremony for the company, Keo Maly, director of Alpha Gold Futures, said that the company would first offer services to execute buy and sell orders for gold, as well as a mixed bag of foreign currencies. The company plans to expand operations in the future to the buying and selling of oil derivatives and other global commodities.

“By investing in Alpha Gold Futures, we guarantee that your investment is carefully and clearly managed by our professional team,” Maly said.

Derivative trading consists of two main entities that include a brokerage firm and central counterparty that acts as a clearing house.

According to regulations set by the Securities and Exchange Commission of Cambodia (SECC) in late 2015, a brokerage firm must meet a minimum capital requirement of $250,000 while a central counterparty must have $5 million.

Sou Socheat, director of SECC, said yesterday that since the market became regulated, there are now more than 10 licensed derivative brokerage firms. In March of this year, the SECC capped the number of central counterparty licences at four, citing adequate demand.

While Socheat declined to disclose the number of registered derivative trading accounts, he said that the popularity of the risky financial instrument was increasing.

“The growth in the number of traders reflects that there is increased confidence in this new market,” he said.

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