GOLD EXCHANGE

Subject : Economics

Context : The Securities & Exchange Board of India (SEBI) has floated a consultation paper on the proposed framework for Gold Exchange in India.

Concept :

The proposal was announced by Finance Minister Nirmala Sitharaman in her FY22 Budget speech.
SEBI, entrusted with the task of regulating the proposed exchange, including for vaulting, assaying and gold quality and delivery standards, said the existing stock exchanges may deal in ‘electronic gold receipt’ (EGR) through a separate segment.
The markets regulator has also suggested a new exchange exclusively for EGR that would have advantages such as better liquidity and single-price reference.
As far as transactions are concerned, SEBI working groups have suggested that an entire transaction be divided into three tranches.
It has been proposed that the vault manager should have a net worth of ₹50 crore and will be required to furnish security deposits.