The Securities and Exchange Board of India vide its notification dated 14th February 2022 has published the trading features pertaining to the electronic gold receipts (EGR), which are electronic receipts issued on the basis of a deposit of physical gold.
SEBI in its Board meeting held on September 28, 2021 approved the framework for Gold Exchange and SEBI (Vault Managers) Regulations, 2021. The EGRs were later notified as ‘securities’ under the Securities Contracts (Regulation) Act 1956 in December 2021, paving the way for operationalization of Gold Exchange in India. Subsequently, framework for operationalizing the Gold Exchange in India were also issued.
Further with a view to specify the details of various aspects of the trading of EGR on the recognized stock exchanges, the following key features has been notified:
- Trading in EGR segment shall be permitted from Monday to Friday.The stock exchanges can set their trading hours within the time limit of 9:00AM to 11:30PM / 11:55PM.
- All stock exchanges shall jointly decide upon the common holiday list within the broad framework of the Negotiable Instruments Act, 1881 and also taking into consideration Central/State/Local holidays and notify the same,well in advance,to the market under prior intimation to SEBI.
- The pre-open session will be for a duration of 15 minutes – from 8:45 AM to 9:00 AM, out of which 8 minutes will be allowed for order entry, order modification and order cancellation, order matching and 4 minutes for trades. Confirmation and the remaining 3 minutes will be a buffer period to facilitate the transition from the pre-open session to the normal market.
- Price range of +/-5% from reference price shall be applicable on EGRs during pre-open session.
- Limit orders and Market orders shall be entered during the pre-open session.
- For transactions in EGR segment, it is mandatory for all clients to have Unique Client Code (UCC). The stock exchanges shall not allow execution of trades without uploading of the UCC details. For this purpose, Permanent Account Number (PAN) issued by the Income Tax Department will be verified.
