A precious metals depository will be established at Hong Kong International Airport by the end of the year, the Airport Authority announces.

The authority will proceed to establish the new facility upon the Legislative Council's approval of a proposed waiver of trade declaration charges for gold.

The depository will provide a central, secure storage facility for traders, institutional investors, gold producers and refineries, and serve as a physical settlement platform for trades made on the Chinese Gold & Silver Exchange Society and other Asian markets. T

The depository will also minimise risk, and reduce settlement time, transportation and insurance costs for the industry.

Stimulating capital flows

Airport Authority Chairman Dr Victor Fung said the depository will allow Hong Kong to act as a bridge between global gold producers and markets on the Mainland.

"The new facility will also stimulate capital flows and provide a platform for the creation of innovative, gold-based investment products and services," Dr Fung added.

The depository will initially be a wholly-owned subsidiary of the authority, with the long-term objective of divesting to the depository's major users. To ensure its services and physical infrastructure meet industry needs, an advisory committee has been formed.