Singapore Diamond Investment Exch. Launched

Singapore: Trading has started on the Singapore Diamond Investment Exchange (SDiX), the world’s “first” commodity exchange for physically-settled diamonds.

The introduction on May 5 “represents the most significant change in global diamond trading practices in hundreds of years,” according to SDiX, which is backed by investors including the Singapore government’s sovereign wealth fund Temasek Holdings.

“The SDiX represents a tectonic shift in how diamonds are traded,” said Alain Vandenborre, the platform’s executive chairman and founder. “By providing the first-ever transparent and open price discovery mechanism for diamonds, the exchange unlocks a major opportunity for investors to trade diamonds as an asset class.”

In addition to Temasek, SDiX is backed by Vertex Venture Holdings, a wholly-owned subsidiary of Temasek, and big-name businessmen such as veteran investor Jim Rogers and Sun Tongyu, one of the founders of Alibaba.

The old-fashioned method of trading diamonds in physical bourses gives buyers no transparency on the trading process and access to pricing information, and only offers limited ability to investors who would like to participate in the market, SDiX claimed.

The exchange is built on an “ecosystem” that includes an electronic trading platform, a depository for the physical settlement of diamonds and a global network of service providers to support it, such as the Gemological Institute of America. Standard Chartered Bank will provide banking services and facilitate the cash settlement of transactions, SDiX said.

The new bourse launches with broker members across Singapore, Hong Kong, London and Dubai. Trading hours are between 2.30 p.m. and 6.30 p.m. Singapore time to allow global traders to participate.