By Geoffrey WyattApril 2nd, 2019
U2 Diamond Prices Ltd, a wholly owned subsidiary of U2 Diamonds Ltd, has been authorized by the UK’s Financial Conduct Authority (FCA), under reference 826449, as an authorized Benchmark Administrator under the European Benchmark Regulation (EBR) for its four investable polished diamond indices, and is now one of 30 companies in Europe to appear on the list of ESMA Benchmark Administrators.
This approval allows financial institutions and issuers to reference products to the 0.3, 0.5, 1.0 carat and composite indices that are published daily on the u2diamondprices.com website.
U2 has been publishing polished diamond indices on polishedprices.com since 2002 and the rough diamond index on roughprices.com since 2005, but these new investable indices represent the first time a diamond-based index has been fully regulated under the tougher regulations that followed the Libor rate-rigging scandal.
The EBR provides a common framework for benchmarks across the EU to enable regulated companies to be certain that the benchmarks they are using are robust, reliable and controlled.
In notifying U2 Diamond Prices, the FCA commented that this is the first approval they have given for an administrator of commodity benchmarks from the 18 UK-based firms on the ESMA register.
U2 is the only independent data agency providing prices for polished diamonds based on multiple sourced actual transactions where the complete methodology is explained on its website. U2 operates strictly as an information provider, and hence does not trade in rough or polished diamonds.
U2 with its unique price feed, historical data and proprietary weighting methodology has the only reliable indices that provide an accurate and unbiased reflection of movements in diamond prices.
We would like to acknowledge the significant contribution from our technology partner Artonezero and our price feed contributors listed on our website in helping U2 to receive this landmark approval for diamonds.
U2’s pricing database contains over 2.9 million individual polished diamond transactions with a value of over $14.5 billion provided by multiple bonafide firms in the main diamond-trading locations, all of whom are U2 shareholders, as part of a data for equity scheme.
Geoffrey Wyatt, CEO of U2 Diamonds says
“We are delighted to be the first regulated pricing source for polished diamond prices; this presents a huge opportunity for the industry to break out of its long cycle of flat diamond prices and boost the industry’s margins and profitability.
It opens the door to creating diamond linked financial products from which all other commodities have benefited for a long time. A physical diamond fund, for example, would provide a new class of cash customer for the industry at a time when flat demand and squeezed liquidity are such major issues.”
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