The proposal for establishing a gold exchange was approved by the Sebis board on Tuesday. The bourse would assist in having a transparent domestic spot price discovery process and will allow for the trading of gold in the form of electronic gold receipts.
According to Sebi Chairman Ajay Tyagi, the gold-representing instruments will be known as Electronic Gold Receipts (EGRs) and would be registered as securities.
According to him, EGRs will have the same trading, clearing, and settlement features as other securities.
Any reputable stock exchange, old or new, is permitted to begin trading in EGRs in a distinct sector. The stock exchanges may choose the denomination for EGR trading and conversion into gold with the consent of
According to Sebi , the gold exchange would establish a thriving gold ecosystem in India by embracing the complete ecology of trading of EGR and physical delivery of gold.
The exchange will, according to the regulator, establish a national pricing system for gold as well as serve as a platform for buying and selling EGRs with standardised gold in India.
According to Sebi, the gold exchange is anticipated to provide a number of advantages for those involved in the value chain as well as for the broader gold market ecology, such as effective and transparent price discovery, investment liquidity, assurance of gold’s quality, etc.
By transferring EGRs and money to the buyer and seller, respectively, the clearing organization will settle trades made on stock exchanges.
Since EGRs have eternal validity, the EGR holder may hold them for as long as desired. Upon surrender of EGRs, such a holder may also choose to remove the underlying gold from the vaults.
According to Sebi, EGRs will be made fungible and interoperability between vault managers will be permitted in order to reduce the expenses related to the extraction of gold from the vaults.
Defining the requirements for vault managers, Sebi stated that a vault manager must be an organization with Indian incorporation and a net worth of at least Rs 50 crore.
For the purpose of offering vaulting services intended for gold deposited to establish EGRs, the vault manager will be registered and governed as a Sebi intermediary.
The duties of the vault manager include receiving deposits, storing and protecting gold, creating and withdrawing EGR, resolving grievances, and performing periodic reconciliations of physical gold with depository records.
Nirmala Sitharaman, the finance minister, announced the budget for 2021–2022 with the announcement that Sebi will oversee gold exchanges and that the Warehousing Development and Regulatory Authority (WDRA) would be enhanced to create the framework for the commodity market ecosystem.
Additionally, the regulator has agreed to loosen the criteria for shares with better voting rights, according to Tyagi.
Tyagi stated that a proposal for the establishment of the social stock exchange, which would be used by social entrepreneurs to raise money, had been approved.
Tyagi added that he was unable to provide a date for the exchange but that he would work with the government to get it forward. We will investigate any legal violations in the Zee-Sony merger case, Tyagi stated following the board meeting.
The Investors Charter for Securities Market and a proposal to change the de-listing procedure following an open offer were also approved by the board.
Additionally, Sebi decided to loosen the criteria for holding shares with enhanced voting rights. A proposal to change the de-listing structure following an open offer was approved by the Sebi board.
(Only the report’s headline and image may have been changed by the Business Standard team; all other material was likely created automatically from a syndicated feed.)