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Gold January 04, 2022 12:25:13 PM

SEBI Notified Regulations on Setting Up Gold Exchange

Paul Ploumis
ScrapMonster Author
The vault managers are required to make an application to the regulator for grant of a certificate of registration.

SEBI Notified Regulations on Setting Up Gold Exchange

SEATTLE (Scrap Monster): The Securities and Exchange Board of India (SEBI) has notified regulations for vault managers in setting up gold exchange in the country. Earlier in September 2021, the market regulator had approved proposal for setting up gold exchange, wherein gold will be allowed to be traded in the form of electronic gold receipts.

According to SEBI, the instruments that represent gold will be called electronic gold receipts (EGRs), whereas they will be notified as securities. Like other securities, the EGRs will have trading, clearing and settlement features. The proposed gold exchange will supervise the entire ecosystem of trading of EGR as well as physical delivery of gold.

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As per the notification, vault managers must be registered and regulated as a SEBI intermediary in order to provide vaulting services for gold EGRs. The vault managers will be responsible for various activities including accepting deposits, safekeeping of gold, creation and withdrawal of EGR, addressing of complaints and periodic reconciliation of physical gold with actual records.

The vault managers are required to make an application to the regulator for grant of a certificate of registration. The applicant must be a body corporate incorporated in the country and must have a minimum net worth of INR 50 crore. They must have all systems in place to record all transactions and maintain proper documents.

 

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