Pioneering diamond exchange coming up

Mr Alain Vandenborre is executive chairman and chief financial officer of SDiX, which is touted as a world's first and has been under development for two years at a cost of up to $10 million.
Mr Alain Vandenborre is executive chairman and chief financial officer of SDiX, which is touted as a world's first and has been under development for two years at a cost of up to $10 million.ST PHOTO: CAROLINE CHIA

A pioneering exchange to make diamond trading much easier and more transparent is expected to be up and running here by October.

The Singapore Diamond Investment Exchange (SDiX), which is touted as a world's first, has been under development for two years at a cost of up to $10 million, including aid from trade agency International Enterprise (IE) Singapore.

SDiX executive chairman and chief financial officer Alain Vandenborre told The Straits Times yesterday: "Many locations call themselves diamond exchanges, but they are actually just bourses.

"How an exchange differs from a bourse is that after searching through the inventory, at the end of the day, traders in a bourse still have to go offline, pick up the phone and discuss the pricing," said Mr Vandenborre.

With the inclusion of middlemen in the transactions, the price of polished diamonds at wholesale level is $22 billion annually, but rises to $84 billion at the consumer level.

"On SDiX, we aim to bring together everything into an integrated trading platform, from polishing right up to selling," said Mr Vandenborre. SDiX also aims to bring about greater price transparency. It has devised regulations that have already been submitted to IE Singapore to ensure they are in line with the Commodity Trading Act.

SDiX has potentially more than 25 pioneer members for the launch, comprising approved suppliers and brokers from Singapore, India, Hong Kong, the United States, Belgium and Britain. The exchange is headquartered in Singapore due to its secure infrastructure and regulatory environment.

The SDiX has two vaults, one here in Changi and one in the Bharat Diamond Bourse in Mumbai. The Mumbai vault, which is a holding facility, is expected to move $25 million worth of diamonds a day, while the Singapore facility is for storage.

"By the end of 2016 we hope to achieve $250 million worth of transactions, with $100 million worth of diamonds stored in Singapore," said Mr Vandenborre. There are also plans to open offices for support services in Hong Kong, Dubai and China later this year and eventually in a European city, such as Geneva, Antwerp or London.

A version of this article appeared in the print edition of The Straits Times on July 02, 2015, with the headline 'Pioneering diamond exchange coming up'. Print Edition | Subscribe