The DDC Trading Guide includes key terms and codes of practice that are practiced when dealing at the Diamond Dealers Club.
ARBITRATION
Membership in the DDC obligates each member to settle any disputes with any other member through the DDC’s ARBITRATION tribunals. No member may go to any outside court system for resolution of complaints with another member unless the Club’s ARBITRATION system expressly grants that permission. Arbitrators have the power to subpoena, fine and suspend members who do not abide by their decisions.
State and Federal courts have consistently upheld the DDC’s jurisdiction and the decisions of its Arbitration Tribunals.
ARBITRATION is a last resort for members who cannot reconcile their differences. Frivolous complaints should not be filed and could lead to fines.
A portion of the stated purpose of the Diamond Dealers Club reads:
“The object of this Organization, through its Board of Directors, shall be to foster the interests of the Diamond Industry, to inculcate just and equitable principles in trade, to eliminate abuses and unfair trade practices relative thereto or affecting the same…..”
Your understanding of and compliance with the rules and regulations of this brochure will strengthen and further our goals, and you will enjoy the benefits derived by being part of the Diamond Dealers Club
BROKER
A BROKER acts as an intermediary between buyer and seller. He takes merchandise on consignment and offers the goods to potential buyers. When a prospective buyer makes an offer (bid) to the owner (patron), the owner may or may not accept the offer. The BROKER’S role is to negotiate between buyer and seller until a mutually agreeable offer is reached. During this negotiation period, the item(s) must be sealed in a CACHET. The owner has the option of directing the BROKER to deliver the goods as sold, of having the CACHET opened by the bidder as not accepting the offer, or of withdrawing the item(s) from the negotiations.
The BROKER is fully responsible for the goods lost, exchanged or damaged while on MEMORANDUM to him. The BROKER shall return merchandise to the owner upon the owner’s request.
A BROKER may not leave merchandise for inspection or for any other purpose with a prospective buyer without the express permission of the owner (patron).
A BROKER shall notify the seller of an offer and its terms, as well as the identity of the prospective buyer. Having done so, the BROKER bears no financial responsibility in the event of a buyer’s default. A BROKER who issues his own INVOICE and/or fails to inform the seller of the buyer’s identity becomes in actuality, the buyer with full financial, legal and ethical responsibility to pay the seller, whether his customer pays him or not.
Once a sale is completed, the BROKER is entitled to a COMMISSION of not less than 1% of the sale amount. Any variation of this COMMISSION percentage must be agreed upon between seller and BROKER prior to any sale.
A BROKER may also act as a finder for the buyer. He searches the market for particular goods at the buyer’s request. In the event the BROKER introduces the client to a new source of goods, and in the event that the client should then establish ongoing direct contact with the new source thereby by-passing the BROKER, the new source (seller shall be obliged to pay the BROKER a COMMISSION on all subsequent sales to that buyer for a period of time that shall have been established between the parties involved.
CACHET
A CACHET is a sealed envelope in which a prospective buyer has placed a stone(s). The CACHET precludes the viewing of the sealed goods by anyone other than the prospective buyer. An offered price and any terms that may be desired can be written on the CACHET which constitutes an offer by the buyer.
A CACHET is valid for 24 hours (or one full working day) when sealed by a New York buyer, and up to 48 hours (two working days) when the prospective buyer is out of New York and the transaction is handled by a BROKER in New York.
COMMISSION
COMMISSION is not less than one percent (1%) of the total sale amount in the absence of a prior agreement to the contrary. Payment of the BROKER’S COMMISSION is the responsibility of the seller and not the buyer, unless an understanding was reached prior to the completion of the sale. It is unethical for the seller and buyer to by-pass the BROKER and deal directly once negotiations have begun.
DEALER
A DEALER is an independent merchant selling goods from his own inventory or merchandise for which he has accepted full responsibility with the approval of his source. He issues his own INVOICE and is, in effect, the seller.
DISCLOSURE
As a member of the DDC, it is your solemn responsibility towards another member, or any potential buyer, to disclose both verbally and on all documentation (INVOICES, MEMORANDUMS, etc.) any treatment or any other process which alters the clarity or color of the merchandise or any part thereof. Failure to do so can result in a fine and/or suspension.
DRESS
In order to maintain an atmosphere of professionalism and businesslike behavior, the DDC has established dress code. Male members must wear a blazer or suit jack at all times. Jeans and sneakers may not be worn in the trading room by members, buyers, guests, except as noted herein. Female members and guests are not required to wear blazers or jackets but must be dressed professionally. Friday, however, is a dress-down day when jeans are permitted if they are appropriate and neat. All other dress regulations apply.
FLOOR COMMITTEES
Members of the Board of Directors of the DDC constitute FLOOR COMMITTEES who hear complaints of Club members against each other. Furthermore, these FLOOR COMMITTEES are available to deal with breaches of conduct and ethics. These breaches can include both those written and those unwritten, which are universally accepted by diamantaires. FLOOR COMMITTEES may subpoena, levy fines, and suspend members who do not abide by their decisions.
INVOICE
An INVOICE documents the transfer of goods from seller to buyer. INVOICES should be filled out correctly and should include the names of the buyer and seller, the date, a full description of the goods including any DISCLOSURES, the price, and terms of sale. It is expected that the terms of sale will be complied with.
MEMORANDUM (MEMO)
Merchandise given on consignment can be designated on a MEMORANDUM (MEMO). The goods so entrusted cannot be sold without the explicit permission of the owner and remain the property of the owner until a transaction is completed. The items listed on the MEMORANDUM become the consignee’s financial, legal and ethical responsibility from the moment the MEMO is signed. It is recommended that the MEMO be signed directly under the last item listed.
Goods on MEMORANDUM may not be pledged, offered, mailed, subsequently given to someone else on MEMO, nor can they in any way leave the possession of the consignee without the owner’s explicit consent.
It is good policy to check the weight of the goods on receipt and to make sure that the goods are examined and weighed by the owner upon return. When returning the goods, ask for the original signed copy of the MEMORANDUM or see that each stone returned is crossed off the MEMO by the owner.
MEMOS should be filled out correctly. Use proper names, accurate weights, dates and prices. If a percentage below any price guide (price list) is used, indicate which guide is used and the date of the issue used.
Goods on MEMORANDUM may be recalled at the discretion of the owner. Goods must be returned promptly upon demand by the owner.
SIGNING IN GUEST BUYERS
Members who sign in non-Club members as buyers are financially responsible for their purchases, regardless of who signed the weight slip or the MEMORANDUM. There are no exceptions to this rule. Members are therefore advised to thoroughly verify the credit resources of the customer they are sponsoring. It is better to be safe than sorry.
It is unethical for another member to approach a customer and attempt to “steal” him away from the member who signed him in. Any violation of this rule should be immediately reported to a Board member. Violators will be subject to fine and/or suspension.
TERMS
Unless stated otherwise on a CACHET, MEMORANDUM or INVOICE, payment is due at the time the transaction is made. Terms must be adhered to.
VISITORS
Members may bring visitors into the Club. Guests must comply with the dress code and may be brought in only during visiting hours which are conspicuously posted in the Club. Security Guards strictly enforce these visiting hours.
Guests must remain with the member who signed them in and must always wear their ID badge in an obvious fashion. Guests must remain within the Club’s center corridor and may not approach the trading tables. Any visitor who violates these regulations or is discovered examining or displaying merchandise will be immediately escorted from the Club and denied future visitation. The member who signed that guest in may be penalized.