Tradable Products Specifications and Settlement Procedures

1. General Definitions

In these product specifications, the terms set forth below have the following meanings:

  1. In the case of precious metal held in fungible bulk form, “Credit” or “Credits” means, or mean, entries made on the TWM DL and account records maintained by the Depositories and account statements the Depositories issue to a customer with a Pool Account with the Depository which indicate and represent the pro rata ownership interest of a specific quantity of precious metal measured in Ounces (or fractions thereof) of the precious metal held by the Depository on behalf of customers with Pool Accounts (“Credits”) where each Credit represents the ownership of one Ounce of fine precious metal. In the case of precious metal held in other forms, please see the definition of the term “Receipt” infra.
  2. “Fine Gold” means 9,999 or more parts of gold per 10,000 parts.
  3. "Ounce" means troy ounce.
  4. “Pool Accounts” means the accounts recording the respective amounts, in Ounces, of fine precious metal, held by a Depository on behalf of a customer on an Unallocated basis.
  5. ”RCM ” means the Royal Canadian Mint, a Royal Crown corporation, with its principal vaulting facility located at 320 Sussex Drive, Ottawa, Ontario K1A 0G8, Canada.
  6. In the case of precious metal held in the form of individually identified bullion bars, ingots, wafers, bags of coins or coins, the term “Receipt” means a record that identifies a specific bullion bar, ingot, wafer, bag of coins or make and weight of coins and for bars, ingots, wafers and bags of coins, the precious metal, serial number (or other unique identifier), weight, fineness, and refiner of the bar, ingot, wafer and bag of coins.
  7. “Unallocated” means precious metal that is part of a fungible bulk of precious metal contained in the form of bullion bars, ingots, wafers, coins or work-in-progress held by a Depository, a Depository’s third-party service providers (only to the extent that the Depository guarantees that it is at all times fully responsible for such Fine Gold as bailee), or a Depository’s sub-custodians located in London, England or other locations around the world.

2. Tradable Products

2.1. Royal Canadian Mint Pool U.S. Dollar Fine Gold Credits (“RCM USD Gold Credits”)

2.1.1. RCM USD Gold Credits Specific Definitions

2.1.1.1. “Credit” or “Credits” means, or mean, entries made on the TWM DL and account records maintained by RCM and account statements RCM issues to a customer with a Pool Account with RCM which indicate and represent the pro rata ownership interest of, and title to, a specific quantity of Unallocated Fine Gold measured in Ounces (or fractions thereof) held by RCM as bailee on behalf of customers with Pool Accounts as bailors (“Fine Gold Credits”) where each Credit represents the ownership of, and title to, one Ounce of Fine Gold.

2.1.1.2. “Fine Gold” means 9,999 or more parts of gold per 10,000 parts.

2.1.1.3. “Ounce” means troy ounce.

2.1.1.4. “Pool Accounts” means the accounts recording the respective amounts, in Ounces, of Fine Gold Credits, calculated to three decimal places, held by RCM on behalf of a customer on an Unallocated basis.

2.1.1.5. “Transfer of Credits” means a transfer of Fine Gold Credits from a Custodial Participant’s RCM Pool Account to the TWM DL RCM Pool Account or vice versa pursuant to RCM’s  procedures as defined in the Pool Trading Account Agreement or elsewhere, or the transfer of Credits on the TWM DL.

2.1.1.6. “Unallocated” means Fine Gold that is part of a fungible bulk of gold contained in the form of bullion bars, ingots, wafers, coins or work-in-progress held  by RCM, RCM’s third-party service providers (where RCM guarantees that it is at all times fully responsible for such Fine Gold as bailee), or a RCM’s sub-custodians located in London, England or other locations around the world.

2.1.2. Contract Specifications

Each contract is for the spot sale of one Fine Gold Credit.

2.1.3. Trading Specifications

2.1.3.1. Trading Hours – The hours of trading for RCM U.S. Dollar Gold Credits will be determined by TWM and posted on TWM’s website.

2.1.3.2. Trading Unit – The unit of trading will be one Ounce of Fine Gold.

2.1.3.3. Price Increments – The minimum price fluctuation for RCM USD Gold Credits is ten United States cents (US $0.10) per Ounce.

2.1.4. Settlement Procedures

On the second business day following a trade executed on the TWM ECN (or at such other time the buyer’s and seller’s Custodial Participants mutually agree), the buyer’s Custodial Participant will pay the seller’s Custodial Participant U.S. Dollars equal in amount to the execution price times the number of contracts traded and the seller’s Custodial Participant will deliver through the TWM DL to the buyer’s Custodial Participant the number of Credits purchased.

2.1.5. RCM Disclosures and Limitations of Liability

2.1.5.1. Warehouse Liens

The terms of the Pool Account agreement between TWM and the Royal Canadian Mint (the “RCM”), as is customary, provide RCM the right “to set-off any fees, costs, expenses and interests payable to RCM under the Agreement (which include, but are not limited to, the expenses incurred by RCM in collecting the fees and expenses payable to RCM under the Agreement, including, but not limited to, reasonable legal fees), against the equivalent amount of the Fine Gold in the Customer’s Pool Account, determined using the p.m. price of gold expressed in the U.S. dollars, as published by the LBMA (or, should the LBMA cease to publish gold prices, any other gold spot rate selected by RCM acting reasonably), on the day of issuance of said written notice.”

2.1.5.2. Limitations of Liability in Force Majeure and Other Extreme Scenarios

Although RCM bears the risk of loss or destruction of the Fine Gold held in the TWM Pool Account held with Mint, the Pool Agreement between TWM and RCM provides that, among other limitations of liability, RCM is not liable for any damages, losses, costs and/or expenses and/or for non-performance and/or delays of service caused by or resulting from any of the following, whether suffered directly or indirectly by RCM:

  1.  either:
    (1) war, hostile or warlike action in time of peace or war, including action in hindering, combating or defending against an actual, impending or expected attack (i) by any government or sovereign power (de jure or de facto); or (ii) by any authority maintaining or using military, naval or air forces; or (iii) by an agent of any such government, power, authority or forces; or
    (2) nsurrection, rebellion, revolution, civil war, usurped power or action taken by governmental authority in hindering, combating or defending against such an occurrence or confiscation by order of any government or public authority.
  2. (i) ionising radiations from or contamination by radioactivity from any nuclear fuel or from any nuclear waste or from the combustion of nuclear fuel; (ii) the radioactive, toxic, explosive or other hazardous or contaminating properties of any nuclear installation, reactor or other nuclear assembly or nuclear component thereof; (iii) any weapon or device employing atomic or nuclear fission and/or fusion or other like reaction or radioactive force or matter; (iv) the radioactive, toxic, explosive or other hazardous or contaminating properties of any radioactive matter, with the exception of radioactive isotopes when such isotopes are being prepared, carried, stored, or used for commercial, agricultural, medical, scientific or other similar peaceful purposes other than for nuclear fuel; or (v) any chemical, biological, or electromagnetic weapon;
  3. any act of terrorism or any action taken in controlling, preventing, suppressing or in any way relating to any act of terrorism.  An act of terrorism means an act, including but not limited to the use of force or violence and/or the threat thereof, of any person or group(s) of persons, whether acting alone or on behalf of or in connection with any organization(s) or government(s), committed for political, religious, ideological or similar purposes including the intention to influence any government and/or to put the public, or any section of the public, in fear;
  4. the use or operation, as a means for inflicting harm, of any computer, computer system, computer software, computer software programme, malicious code, computer virus or process or any other electronic system;
  5. a case of Force Majeure.

2.1.5.3. Right to Compensate for Lost Gold in Cash in Certain Situations

The Pool Account agreement between TWM and RCM provides that in the event of loss and/or destruction of Fine Gold where RCM bears the risks of loss or destruction in accordance with the Agreement, RCM shall, at its discretion, either:

  1. replace the quantity of lost and/or destroyed Fine Gold regarding which the Customer is the duly authorized agent of the owner;
  2. compensate the Customer for the monetary value of the lost and/or destroyed Fine Gold regarding which the Customer is the duly authorized agent of the owner, using the p.m. price of gold expressed in U.S. dollars, as published by the LBMA (or, should the LBMA cease to publish gold prices, any other gold spot rate selected by RCM acting reasonably), on the first (1st) trading day following the discovery of said loss and/or destruction by RCM if first discovered by RCM, or, if first discovered by the Customer, on the first (1st) trading day following the date the relevant Notice of Loss was given to RCM; or
  3. replace a portion of the lost and/or destroyed Fine Gold for which the Customer is the duly authorized agent of the owner and compensate the Customer for the monetary value of the remaining portion of lost or destroyed Fine Gold for which the Customer is the duly authorized agent of the owner using the p.m. price of gold expressed in U.S. dollars, as published by the LBMA (or, should the LBMA cease to publish gold prices, any other gold spot rate selected by RCM acting reasonably), on the first (1st) trading day following the discovery by RCM of said loss and/or destruction if first discovered by RCM, or, if first discovered by the Customer, on the first (1st) trading day following the date the relevant Notice of Loss was given to RCM.