You will be able to trade in electronic gold! ‘Gold Exchange’ will be built on the lines of stock market; SEBI approval
The board of directors of market regulator SEBI has approved the proposal regarding the framework for the formation of gold market or gold exchange. In this market gold can be bought and sold in the form of electronic gold receipt. This exchange, which acts like a stock exchange, will help in creating a transparent domestic spot price discovery system for the precious metal. Securities and Exchange Board of India (SEBI) Chairman Ajay Tyagi said that the instrument representing gold would be called Electronic Gold Receipt (EGR) and it would be notified as securities. He said that like any other security, EGR will have arrangements for trading, clearing and settlement.
Any recognized, existing and new exchange can start trading in EGR. With the approval of SEBI, the stock exchange can decide about the amount of EGR business and converting the electronic gold receipt into gold. SEBI said that the gold market will cover the entire environment of trading of EGR and delivery of gold in physical form. This is expected to create a vibrant environment regarding gold in the country.
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According to the regulator, the exchange will be the national forum for trading of EGR with standardized gold underlying India. It will also create a national price structure for the yellow metal.
“The gold market is expected to bring several benefits to the participants from the value chain,” SEBI said. At the same time, it is expected to bring many benefits to the entire gold market environment including more efficient and transparent price discovery, investment liquidity, assurance about the quality of gold. The clearing corporation will settle the deals done in the stock exchanges. This includes EGR and transfer of funds between buyers and sellers.
Finance Minister Nirmala Sitharaman, while presenting the budget for 2021-22, had said that SEBI would be the regulator for gold exchange and the Warehousing Development and Regulatory Authority (WDRA) would be strengthened to set up the commodity market environment.
(This news has not been edited by NDTV team. It has been published directly from Syndicate feed.)