The Securities and Exchange Board of India on 10th January 2022 has notified a framework for operationalizing the gold exchange. The instrument for trading in Gold Exchange/Segment shall be referred to as ‘Electronic Gold Receipts’ (EGR) which has been notified as ‘securities’ under Section 2(h)(iia) of the Securities Contracts (Regulation) Act 1956.
New and existing recognized stock exchanges may launch and deal in EGRs, in a new segment. The transaction in a gold exchange has been divided into three parts- creation of EGR, Trading of EGR on stock exchange/s and conversion of EGR into Physical Gold.
A common interface will be developed by depositories, which will be made accessible to all the entities i.e, vault managers, depositories, stock exchanges, and clearing corporations.
Further all the existing deposit of gold lying in the vaults, which meets the criteria and has never been out of the vaulting infrastructure, can be considered for conversion into EGR.
To increase the reach of gold exchange, all existing branches of vault managers may be allowed as ‘collection and/or withdrawal center’, which meets the safety standards, as specified by Sebi. The details of withdrawal centers shall be available on the websites of depositories and vault managers.
The storage and withdrawal charges will be levied by the vault managers and be collected by the depository from the beneficial owner of EGRs, for onward payment to the vault managers.
