Capital markets regulator Sebi has given in-principle approval to BSE for introducing Electronic Gold Receipt (EGR) on the stock exchange's platform.
For final approval for the introduction of EGR segment, the exchange has been advised to submit additional information, according to a regulatory filing on Thursday.
Sebi, in January, came out with a framework for operationalising the gold exchange, wherein the yellow metal will be traded in the form of EGRs.
Also, the regulator has notified rules for vault managers paving the way for operationalising of the gold exchange.
"Sebi vide its letter dated February 9, 2022, has granted its in-principle approval for introducing EGR segment on BSE Limited," the exchange said.
Under the rules, the entire transaction has been divided into three tranches -- creation of EGR, trading of EGR on stock exchange and conversion of EGR into physical gold.
The bourses can launch contracts with different denomination for trading or conversion of EGR into gold.
The source of supply of the physical gold to be converted into EGR will be the fresh deposit of gold coming into the vaults, either through imports or through stock exchanges-accredited domestic refineries.
A common interface will be developed by depositories, which will be made accessible to all the entities -- vault managers, depositories, stock exchanges and clearing corporations.
To lower the costs associated with withdrawal of gold from the vaults, EGRs have been made "fungible" and "interoperability between vault managers" have been allowed.
In October 2021, BSE Chief Business Officer Sameer Patil had said the exchange is ready with its technology to introduce EGRs on its platform, which will help in creating uniform price structure of the yellow metal across the country.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
RECOMMENDED FOR YOU