Who we are and where we came from
The Company
Business history
The Board
Who is BullionVault's regulator ?
Is there a compensation fund to compensate me in the event of loss ?
Does BullionVault report my gold trading activity ?
BullionVault is owned by Galmarley Limited [name origin], which is company number 4943684 registered in Great Britain.
As at March 2012 the company had 49 shareholders. For a modest fee you can obtain a full and formal shareholder list, updated annually, from Companies House.
Galmarley's offices are in West London (UK) and we welcome callers by appointment. Our contact details are here.
Our services are delivered to you by computer machinery hosted in separate locations in Britain and USA, which we connect to and manage from our London offices.
Galmarley is involved exclusively in bullion and bullion-related information technology. It owns not only www.BullionVault.com but also www.galmarley.com
The www.galmarley.com site is a free educational resource for researchers seeking information on gold's monetary history, its modern role, and how it is traded around the world. It was developed and published in 2001/2 and became one of the most visited and studied gold resources on the internet.
Feedback from Galmarley's many tens of thousands of visitors inspired the BullionVault service.
Resulting from the Galmarley site feedback an original £275,000 [$500,000] of seed capital was injected at the incorporation of Galmarley Ltd in October 2003, and it funded the early planning and development of the BullionVault service.
After developing the software, and over a period of two years from March 2005, the business raised approximately £3.5m in equity funding. This money was invested in gold bars and currency to provide the inventory which the business needed to operate.
The accessibility, safety and value of gold bought through BullionVault quickly made the service popular, and the business traded profitably in year one. Its revenues come from a mixture of four sources:-
The major expenses of the business are:-
The company traded profitably from its first year (2005). We have grown steadily, and particularly rapidly since 2008.
On 1st September 2008 we were elected into the London Bullion Market Association which represents the largest of the world's physical bullion markets.
In April 2009 we won the Queen's Award for Enterprise (Innovation) for our use of technology in making the efficiencies and reliability of the professional bullion market available to private customers.
We always publish our most recent audited accounts on-line. The 2011 accounts are available here.
By March of 2012 we had over 38,000 active customers, from 126 countries, holding approximately $2.2 billion in stored bullion. In fact, with more than 29 tonnes of gold and 291 tonnes of silver bullion, BullionVault's customers are already holding significantly larger reserves than most of the world's central banks.
Our financial strength is formidable. Our asset value per £1 ordinary share has grown to over £40, and those assets are denominated in currency balances and our own gold bullion stock, all held at call.
This strength was consolidated when on 17th June 2010 we completed an important deal. The World Gold Council (the gold industry's key market-development organization) and Augmentum Capital (a technology private equity fund whose main investor is RIT Capital Partners PLC – the FTSE listed, £2bn (US$3bn) investment trust where Lord Rothschild and family own a substantial minority interest) each bought an 11.4% equity stake, investing a total of £12.5m.
Augmentum originally approached us in May 2009, and WGC approached us the following November. They were both impressed by:
Having completed extensive Due Diligence on our track record, our product, our customer proposition and of course our financials, both elected to take a minority stake in Galmarley. Both the WGC and Augmentum sit on the Board and contribute to the strategic direction of the company, bringing respectively a deep understanding of our marketplace, and a strong track record in high-growth technology businesses.
Preferred partner of the World Gold Council, BullionVault is endorsed and recommended by the WGC for retail gold bullion.
CEO and founder : Paul Tustain, 48. A graduate of Computer Science, Paul spent his early career in investment analysis and later in the design and implementation of computer systems for major European banks, which he did through his previous company - SAM Systems. Through attempting to invest in gold the proceeds of some SAM shares he sold in 2001, he identified the gap in the market for an efficient, safe and accessible retail marketplace for bullion. Paul provided the initial finance for BullionVault, recruited and directed the development team, and brought the service to market. He owns 44% of the company's issued share capital.
Director : Marcus Grubb. Now Managing Director, Investment at the World Gold Council, Marcus has over 20 year’s experience of the global investment banking industry. Prior to joining the WGC in 2008, he was the founder Chief Executive of what became the world's largest inter-bank dealing exchange for interest-rate swaps, and was previously Global Head of Equities at Rabobank, as well as a top-rated senior investment strategist at UBS, Salomon Brothers and SBC Warburg.
Director : Tim Levene. Founding employee in London of Flutter.com, and then Commercial Director at Betfair.com - the world's No.1 betting exchange, where customers choose their own odds and bet against each other - Tim is co-founder and Managing Partner of technology private-equity fund Augmentum Capital, whose main client is RIT Capital Partners PLC, the FTSE-listed, £2bn (US$3bn) investment trust where Lord Rothschild and family own a substantial minority interest.
Director : Greg Lockwood. Partner at Piton Capital, Greg has been long involved in early-stage internet and communications investing, both as a partner with UBS Capital - where he helped create the second-largest telecom services provider in Switzerland - and then as an angel investor since 1996.
As the head of the board and majority shareholder Paul Tustain accepts responsibility within the company for organising BullionVault's system controls and arranging individual responsibilities within the BullionVault team, and its custody providers, so as to maximise the security of customers' gold and cash.
In addition to development capital Paul Tustain has provided management bonds to the company which is held as gold and cash segregated in favour of customers. These management bonds are non-refundable except in final liquidation, in which circumstance they rank behind all other customer property for repayment.
The value of equity in the company and this loan would therefore be lost before any BullionVault customer incurred any loss resulting from breaches of faith or security on BullionVault.com.
This arrangement is structured to underpin the meaning of 'accepting responsibility'.
BullionVault's objective is to create the world's most cost-effective, secure and accessible market in professional grade gold bullion.
We want to do this because :-
BullionVault is regulated under English Law.
Regulatory responsibility rests on three mutually independent arms of law enforcement: (i) the investigating authority, (ii) the prosecuting authority and (iii) the Criminal Courts.
Bringing a criminal case is not something you would have to do yourself. You would report - for example - a theft, and the investigation and prosecution is the duty of these civil bodies.
In addition you have recourse to the civil law, which would rule on trade disputes between you and us if, for example, you were to allege that we were acting in breach of our stated Terms and Conditions - which form the basis of the business arrangement between us. Bringing a case under civil law would ordinarily incur costs for you.
You should understand that, together with the whole of the London Gold Bullion Market, BullionVault's regulatory status is markedly different from the financial services industry in general.
Modern financial services businesses throughout Europe and America tend to be companies which deal in paper based instruments generally called 'securities', and these are subject to increasing legal sophistication.
As a result of growing complexity too many instances of loss to investors have occurred, where victims have been told that the cause of their loss was regrettable management error, not dishonesty. Yet frequently the managers responsible are insured against personal lapses and many of those responsible for costly error have actually received substantial sums of money on the termination of their employment, while investors have suffered losses.
Meanwhile the effectiveness of straightforward property law has continued to enjoy the full power of the state to identify, prosecute and punish people who steal and defraud.
Because it concerns the absolute ownership of physical metal, and not paper based contractual rights traded as securities, physical bullion trading is deemed simple enough to fall outside the defined scope of formal financial services regulation. Consequently the London Gold Bullion market - which is the biggest in the world - is not regulated by the Financial Services Authority, but by traditional English property law, under codes of practice defined by the London Bullion Market Association [LBMA].
The LBMA, of which BullionVault is the only full member dedicated to retail investment, therefore defines the standards and practices of good commercial behaviour for the entire London Bullion Market. These have maintained such a high degree of trustworthiness and reliability that the LBMA continues to specify the standards for bullion trading around the world. The significant majority of bullion trades executed even in New York are - in fact - traded on the LBMA's 'loco London' terms. This means that deals will be settled in bars obeying LBMA specifications, and that they will pass from the seller's LBMA member vault to the buyer's LBMA member vault, via specialist LBMA member couriers.
We believe this offers a regulatory environment better understood by our customers than is the formally regulated securities industry. BullionVault customers own their gold, and not a piece of paper evidencing an entitlement under a trust, or a liability on a corporate balance sheet. The property rights customers enjoy are simpler, better established, and less subject to change than modern securities law.
Although it is not regulated by the Financial Services Authority BullionVault adopts many of the duties which have been applied by FSA to businesses which have responsibilities for other, less tangible, stores of private wealth. These include:-
BullionVault is a rigorous adopter of these good practices and seeks to maintain an environment where its compliance with these principles is visible and proven.
It is up to you to decide whether you want to raise an informal complaint or a formal one. The key difference between the two is that BullionVault itself resolves informal complaints. Formal complaints are resolved by independent parties.
The informal complaints procedure is usually more accessible and responsive for you because our managers can act immediately, as they think appropriate. Consequently all complaints ordinarily start off as informal and BullionVault seeks to act favourably with every fair-minded customer with a genuine grievance.
Complaints get promoted to formal complaints when a customer is dissatisfied with our response or proposed resolution.
A formal complaint is addressed to a committee of independents which meets infrequently - and then only if formal complaints are outstanding. You will be advised when the next planned formal complaints committee meets in response to your formal complaint.
Formal complaints would ordinarily concern unresolved informal complaints arising from apparent unfairness or breaches of BullionVault Terms and Conditions by BullionVault with direct loss to a customer resulting.
Informal complaints can be made by emailing to the informal complaints email address on our contacts page.
Informal complaints will be acknowledged by BullionVault within 2 working days and will be the subject of management investigation and response within 1 week. A failure to reach a satisfactory resolution within 2 weeks shall entitle the complainant to raise a formal complaint on the issue at any time during the following six months, but in any event the complainant and BullionVault may continue seeking redress on an informal basis.
Before you make a formal complaint ...
If the answer to either of these questions is no your complaint will not ordinarily cause the formal complaint procedure to be initiated.
Formal complaints can be made by emailing to the formal complaints email address on our contacts page.
Formal complaints will be assessed and adjudicated by an independent council of BullionVault users unconnected with the shareholders or management of BullionVault but appointed because of their experience of the market and its technology.
A BullionVault representative will have an organising role and the right to represent the BullionVault position to the council, but no powers of adjudication.
The findings of the council will be posted on the BullionVault website. The council may at its discretion identify the Customer — but ordinarily will not. The council's findings will not be binding in law on either BullionVault or the Customer but its findings can be used by either party in any submission that either party might make to court.
Formal complainants will be required to post $100 (or other currency equivalent) to the BullionVault compensation fund, which will be forfeit in the event of the complaint being deemed by the council trivial or an idle nuisance. This sum will always be returned in the event of a complaint being upheld, and also returned if the complaint is ultimately rejected but deemed made seriously and with a reasonable expectation of being upheld.
Do you believe a crime has occurred on BullionVault?
In most circumstances of suspected crime it would be prudent to contact BullionVault first if you believe BullionVault management would be capable of acting to minimise the effect of any criminal activity.
Nevertheless allegations of criminal theft, or fraud, or other crimes, can be made directly to the London Metropolitan Police. There is no need for such an allegation to be preceded by a complaint to BullionVault and any such requirement would deny customers their civic right to the protection due to them under statute law via the appropriate forces of law enforcement.
BullionVault 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 which is a total maintained under review. The independent council for adjudicating on formal complaints has the exclusive power to distribute benefits from this fund.
Currently there is no reporting of your BullionVault business while your gold is maintained within a Via Mat vault in the normal BullionVault way. Wherever you live your trading activity and gold ownership are not reported to any authorities, anywhere in the world.
Nevertheless there are some issues you should understand.
Do not place the proceeds of crime in a BullionVault account. Do not attempt to launder them through a BullionVault account (which the linked bank account would render unworkable anyway). BullionVault is committed to keeping crime out of the professional bullion markets, out of London, out of New York, and out of Zurich.
© BullionVault.com 2012 - Buy gold online at live gold prices.