As of 10 October 2011, Scoach Switzerland will support trading in structured products with gold as the trading currency. The Swiss central depository, SIX Securities Services, is responsible for the processing. The initial spark for innovation in the sector originates from EFG Financial Products, one of the most innovative issuers of exchange-traded structured products on Scoach Switzerland.
Many investors who are directly invested in gold do not physically hold the gold, but rather keep it in a precious metals account, which is nothing more than a foreign currency account denominated in gold. Gold in this case, with the international currency code XAU, is treated like any other foreign currency. Just as the Swiss franc is the unit of measure for the currency CHF, the currency XAU is expressed in fine ounces of gold, or fractions thereof. Balances in the currency XAU can be exchanged for physical gold at any time at the bank where the account is maintained.
With structured products denominated in gold, investors have the opportunity of investing directly in gold and actively administering their otherwise non-interest earning assets on a gold precious metals account. EFG Financial Products is starting out with an express certificate and multi-barrier reverse convertibles. Additional products and issuers are expected in the coming weeks.
Christian Reuss, CEO Scoach Switzerland: "In times of world uncertainty in relation to currencies, gold is a valid alternative. So it is only consistent to offer gold as a trading currency as well."
Jan Schoch, CEO EFG Financial Products: "We are pleased to have a professional partner like Scoach which recognized the potential of our idea and quickly put into place the infrastructure for trading and settlement, thereby once again underscoring its position as an internationally-leading exchange in our sector. "