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polishedprices

polishedprices. Benchmark Pricing. Price benchmarks. A credible, transparent price benchmark is essential for any third party or investor involvement in the diamond industry Example London Metal Exchange: LME prices are based on traded prices Serve as a reference for the global metals market

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polishedprices

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  1. polishedprices Benchmark Pricing

  2. Price benchmarks • A credible, transparent price benchmark is essential for any third party or investor involvement in the diamond industry Example London Metal Exchange: • LME prices are based on traded prices • Serve as a reference for the global metals market • Vital to miners, smelters, refiners and consumers for negotiating physical deals

  3. Diamond price benchmarks • The diamond industry has for the past 30 years relied on the ‘The New York Highest Asking’ price list, as decided upon by Mr Rapaport • There are other diamond price lists available to the industry, based on ‘Asking’ or ‘Best’ Prices designed to allow a margin to the trader • An objective price source based on traded prices (LME) forms the basis for the development of financial products linked to diamonds

  4. Polishedprices benchmark • Polishedprices was founded in 2002 with the objective of becoming a global transparent price benchmark based on actual transaction based prices along the same lines as LME and other commodity price benchmarks • Polishedprices is a totally independent pricing mechanism: PP management specifically does not trade in rough or polished diamonds

  5. <PLPH> Polishedprices transaction based prices are available to the industry on our website and on the Reuters (2005) and Bloomberg (2006) commodity pages Key criteria for acceptance by Bloomberg and Reuters were how prices were collected, whether there were conflicts of interest and how the prices were weighted

  6. Price Contributors • Polishedprices has data supply agreements with price contributors who send actual buying and selling prices electronically in automated files to the PP data centre • The mechanism is technology driven, aimed at minimizing human intervention • A flagging system monitors anomalies. If there is doubt throw it out! • Price contributors receive equity in U2Diamond Ltd., which owns polishedprices, and thus share in any future potential profits • Shares are distributed in proportion to the amount and frequency of the data that price contributors supply

  7. New Regulations • The LIBOR rate rigging scandal in 2012 and a global probe into the rigging of key foreign-exchange benchmarks in which six large banks were fined has resulted in new proposed regulation for benchmark price providers • Polishedprices is working on compliance with the new proposed regulations (IOSCO and ESMA), providing a solid foundation for other institutions to create financial products linked to diamonds

  8. Conclusion • A transparent price benchmark is essential for the industry to grow and develop new sales channels with third parties • Beneficial for the entire value chain, taking LME as an example from smelters to consumers • The more data processed by polishedprices from as many price contributors as possible, the stronger the price benchmark becomes • Price contributors stand to benefit from future opportunities as a result of the equity scheme • Please join us: info@polishedprices.com

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