The Ministry of Finance vide its notification dated 24th December 2021 has included “Electronic Gold Receipt (EGR)” as securities under section 2(h)(iia) of the Securities Contracts (Regulation) Act, 1956. That implies that EGR have the same trading, clearing, and settlement capabilities as other securities traded on exchanges.
“Electronic Gold Receipt” means an electronic receipt issued on the basis of deposit of underlying physical gold in accordance with the regulations made by the Securities and Exchange Board of India under section 31 of the said Act.
SEBI had earlier stated that any exchange, existing as well as new, can launch trading in EGRs in a separate segment. They can also decide the denomination for trading of EGR with the approval of SEBI.The clearing corporation will settle the trade executed on the stock exchanges by way of transferring EGRs and funds to the buyer and seller respectively.
