Friday, 05 April 2024 17:33

Tradeable warehouse receipts make precious metal holdings more flexible

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Secure storage of gold and silver with an added-value feature

Investors who value gold securities because of their flexibility, yet do not wish to abandon ownership of physical precious metals, can now combine these two aims. The tradeable warehouse receipts issued by the Swiss company OrSuisse allow bars and coins to be easily resold when required – even without any physical movement of goods. Or, as an alternative option, these negotiable warehouse receipts can also be used to secure consumer loans or finance, just like any other securities.

However, they do not function in quite the same way as precious metal funds (ETFs) or precious metal accounts. Unlike these classic gold securities, OrSuisse negotiable warehouse receipts are issued against deposited physical precious metals which are already the property of the respective client. Such deposits can consist of coins and bars fashioned from metals such as gold, silver, platinum and palladium. The prerequisite for the issue of a negotiable warehouse receipt fully compliant with the Swiss Code of Obligations is that the assets must be stored in one of this private company's high-security vaults in Switzerland or Singapore.

Gold and silver investments are deposited and held in these locations under allocated & segregated storage arrangements. This means they are held separately and not stored in a collective storage facility alongside holdings belonging to other clients. Effectively, this means the original bars or coins delivered into storage always remain the owner’s personal property and can be retrieved 1:1 from storage at any time – unlike collective storage arrangements which only undertake to return equivalent products. Allocated & segregated storage is also bank-independent, and all goods are fully insured.

Guaranteed delivery of the listed precious metals to the warehouse receipt holder

Unlike bearer or registered securities, negotiable warehouse receipts can be very easily transferred to a new owner. These documents incorporate endorsement fields designed for this purpose. A document transfer facilitates the no-fuss sale of precious metals – to a specialist dealer, for example – without any requirement for them to even leave the warehouse. Furthermore, the registered owner of a warehouse receipt can assert their right to retrieve the listed goods at any time.

Each tradeable warehouse receipt can be issued for up to ten identical products. These could, for example, be ten Krugerrand gold coins each weighing one troy ounce, or ten silver bars of 250 grams each. An individual negotiable warehouse receipt can therefore represent considerable value.

These precious metal securities are equally suitable for investment products made from gold, silver, platinum or palladium. The purchase of gold investment products is legally exempt from VAT, so gold coins and bars can be stored in Swiss domestic warehouses. But white metals can only be purchased VAT-free along with a negotiable warehouse receipt if the purchased goods are delivered direct into OrSuisse allocated & segregated storage in a duty-free warehouse. Tradeable warehouse receipts provide much greater flexibility and liquidity for any physical precious metal purchase.

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