In all transactions with gold or any other precious metal with any gold dealer, mint or custodian, it is a wise move to do your own due diligence and find out as much about them as possible before you buy gold.
Who are Bullion Vault
Bullion Vault is owned by Galmarley Limited which is a registered company in Great Britain.
As at November 2006 the company has 49 shareholders, the CEO is one Paul Tustain and the offices are located in West London (UK). Other people involved in Bullion Vault are:
Alex Edwards: Chief Operations OfficerGalmarley is involved in gold and gold related information technology and owns not only www.BullionVault.com but also www.galmarley.com.
Kris Jenkins: Chief Technical Officer
Adrian Ash: Head of Research
Catherine Little: Cash Manager
Sonia Franchini: European Operations Executive (German & Italian)
Nittin Saheekoo: European Operations Executive (French)
Robert Nigg: European Operations Executive (German & French)
Bullion Vault operates in a similar way to other gold bullion custodian services. It runs a transparent service listing the funds used to start up the company and purchase the gold in the form of bullion bars which are stored.
As a result of feedback on the Galmarley site, an original start up capital of £275,000 ($500,000) was injected into the incorporation of Galmarley Ltd in October 2003, and this funded the early planning and development of the BullionVault service.
After completing software development and just prior to opening for business, in March 2005, a mixture of external and management funding was obtained from shareholders and management and invested to finance the gold bullion inventory which the business needed to operate. A total of £2m was raised.
£1m of that was convertible, redeemable debt owned by the 29 external shareholders. £0.8m was a 7% irredeemable debt invested by management and £0.2m was new equity which was issued at a substantial premium to the nominal value to the same 29 external shareholders.
This £2m enabled the business to acquire the 'float' of gold bars which is at the heart of the way BullionVault works.
How Does Bullion Vault Work
Simplified, Bullion Vault operates on the basis that you can purchase and store gold bullion and bullion vault will act, for a fee, as the custodian. To use BullionVault one needs to open a free account with them. Once this is done you can then buy gold and have it reside in your account. Note that you are buying actual gold which will reside in a vault operated by Via Mat, an independent professional bullion market vault operator selected by Bullion Vault to look after Bullion Vault gold.
Via Mat is a service provider to Bullion Vault and Bullion Vault is a customer of Via Mat. The management and the capital of the two businesses are entirely separate and independent of each other.
Via Mat is one of the largest vault operators and secure transportation businesses. They operate widely in North and South America, Europe and the Far East. In their home country of Switzerland they dominate the business of physical assets custody and transportation. They are the trusted carrier Swiss banknotes, as they travel between the central bank and the various branches of the Swiss banking industry.
Via Mat sends regular bar lists as evidence of the holding currently in their vaults for Billion Vault. This list will detail the individual bars held in the vault. And their assayed gold content.
Each business day Bullion Vault publishes this bar list on their website, as well as the custody lists daily - but with alias names which users can recognise for themselves while they remain meaningless to everyone else.
On can check one’s own holding this way and cross check the custody list totals directly to the bar lists.
There are careful controls to ensure that no one else can access and remove your gold.
There are two set of controls - Public and Private. Public controls exist to make the process of bullion withdrawal transparent.
For any removal of bullion, Bullion Vault must give 2 days’ notice to Via Mat and publish on the Bullion Vault web site's front page a withdrawal is occurring. This publication states the withdrawing user's alias.
Every Bullion Vault user is able to see that the gold being withdrawn is not theirs, and anyone else who wants to check can also see - via the Daily Audit - that the withdrawer owns sufficient gold to make the withdrawal.
Via Mat also has checks in place. In the storage agreement executed between Bullion Vault and Via Mat there is an undertaken to abort the withdrawal if these checks are not satisfied.
As an extra safety precaution - and again as part of the storage agreement - Via Mat will limit to limit the total withdrawal from the vault to 5% of the vaulted total on any one day. This restriction excludes vault-to-vault shipments of course enabling Bullion Vault to ship large quantities of gold internationally if some form of international crisis has caused many customers to want to do this.
Private controls of course are kept secret. They require, among other things, authorisation checks and acknowledgments by multiple individuals in multiple organisations, which make it impossible for a withdrawal to be authorized by a rogue employee.
When you want to buy gold you simply offer funds to buy the gold by wiring funds into the Bullion Vault client account. The gold, owned by bullion vault was already in the vault when you bought it so no shipment of bullion is required to settle your purchase. A simple transfer of ownership occurs for that gold to the value of the funds transferred on the day you made the purchase.
Bullion Vault can also only offer gold they have in the vault already.
As people buy and sell gold on a regular basis, the ownership of a specific segment of the gold bullion in the vault can change
The gold you own is your actual outright gold. It is not pooled gold and is not held in trust. It is actually a slice of a gold bar, or an entire gold bar if you have purchased sufficient gold, and cannot be used by anyone else. It remains your gold until such time as you on sell it. Bullion Vault does not deal in unallocated gold. Bullion Vault simply sells and buys gold to you and stores it on your behalf.
Opening an Account with Bullion Vault
Opening an account with Bullion Vault is a relatively simple procedure.
On simply clicks on the Register link on the front or home page and follows the instructions.
As one is opening an account that can have stored value it is highly advisable to maintain some security measures with the account such as not typing in passwords, using simple passwords or given passwords to others. Using insecure computers such as internet cafes and university computers which are subject to inspection by IT maintenance.
Once you have opened your account you can buy and store gold bullion, or even trade with it, i.e., buy and sell on a regular basis. And even buy and sell with other account holders. One advantage is that you can trade this way with relatively small amounts. Buying and selling where you are dealing in funds transferred between your bank and bullion vault may involve bank fees by your and corresponding banks so this should be kept in mind when buying and selling gold.
Bullion Vault Security
Bullion Vault maintains a compensation fund out of its commission and contributes at a rate of 10% per commission charged, to a maximum of 10 cents per order. The value of the compensation fund is currently capped at $4m, a total maintained under review.
The independent council for adjudicating on formal complaints has the exclusive power to distribute benefits from this fund.
How Much Does Bullion Vault Cost
The fees for storage are relatively mild and include such things as insurance and security of the gold as managed by Via Mat for example.
Who Owns the Gold Held by Bullion Vault
The owner of the gold held by Bullion Vault is the account holders who have purchased the gold. They hold the legal title to the gold bullion.
The Last Word on Bullion Vault
If you have an account at bullionvault.com and have bought, sold or traded gold with another account holder online, please feel free to leave your feedback on the quality of service and products including any bullionvault.com on line complaints and special attention or service given by bullionvault.com