Physical diamond exchanges are called bourses. This is where the producers sell the diamonds to the cutters and dealers. Some bourses like the Antwerp’s four specialize on raw diamond, other exchanges trade both rough and polished stones. But diamonds is not the only asset traded there. The other asset is information and rumours on pricing and financial situation of the companies. The rumours are pretty common on diamond exchanges since the whole industry greatly lacks transparence.
World Federation of Diamond Bourses, created in 1947, controls the 29 existing bourses in such cities as New York, Los Angeles, Miami, London, Johannesburg, Tel Aviv, Vienna, Paris, Milan, Bongkok, Tokyo, Seoul and Moscow, among others. It also sets the prices for rough, polished, colored or colorless diamonds.
Every company that considers itself professional strives to get access to the bourses as only there they can find supply from the manufacturers. Bourses are different from speculative stocks and cryptocurrency exchanges as they are the places of calm and respectful negotiations. Traders are allowed to examine diamonds with high-tech equipment, calculate risks and hold a discussion. However, there are certain strict rules dictating on how to do the business.
Four Antwerp’s bourses - the Diamond Club of Antwerp, the Bourse du Diamant, Vryes Diamant Handel, and Diamant Kring - make up 80% of the world rough diamonds trading. Diamond Club of Antwerp, opened almost 130 years ago, is the oldest and the strictest one. The entrance to any of the bourses is restricted for those who are not official members. The bourses also implemented their own judicial system, operating outside of any government court system. A person expelled from any bourse is automatically expelled from all the others with a photo posted in every diamond exchange in the world!
This form of organization interfere with progress and allow diamond market to be completely controlled. That is why Diamond Open Market is building a platform implementing a decentralized approach and still maintaining all the high standards of the diamond industry.