Commodity Code
Model Commodity Code Customer Confirmations
In the 1980s, a joint task force of the Commodity Futures Trading Commission (CFTC) and the National Association of State Security Administrators (NASSA) met over a three-year period to address rampant fraud that was occurring in the retail precious metals markets throughout America at the time. The result was the imposition of what have become little known and often overlooked mandatory dealer compliance regulations, commonly known as Model Commodity Code requirements. They exist in more than half of the United States.
Among other things, these state laws require that dealers who sell bullion and coins for storage to purchasers who are citizens of their states (as opposed to direct delivery), must use a third-party storage custodian (that is, these dealers cannot store the assets themselves). This independent storage company must, in turn, send the purchaser a confirmation that it received the purchaser’s assets from the dealer for safekeeping at its facility.
First State specializes in issuing these mandatory confirmations directly to dealers’ customers upon receipt (and withdrawal) of their customers’ assets. This service helps dealers meet the regulatory compliance required in many states and, at the same time, assures their customers that the coins and/or bullion they purchased are stored safely at America’s newest and most advanced rare coin and precious metals depository.
