INSUBCONTINENT EXCLUSIVE:
SEBI has notified rules for vault managers that allow bourses to set up a gold exchangeNew Delhi: Markets regulator Securities and Exchange
electronic gold receipts and the bourse will help in having a transparent domestic spot price discovery mechanism.The instruments
representing gold will be called electronic gold receipts (EGRs) and will be notified as securities
ecosystem of trading of EGR and physical delivery of gold, is expected to create a vibrant gold ecosystem in India.In a notification dated
meant for gold deposited to create EGRs.The obligations of the vault manager include accepting deposits, storage and safekeeping of gold,
creation as well as withdrawal of EGR, grievance redressal and periodic reconciliation of physical gold with the records of depository.Any
have the minimum net worth of Rs 50 crore.Every certificate of registration granted will be valid unless it is suspended or cancelled by
SEBI."Where a vault manager is carrying on any activity besides those laid down in these regulations, then the activities relating to his
business as vault manager shall be separate and segregated from all other activities including earmarking separate space for storage of gold
for the trading of EGR and storage of goods for its other business," it said.The vault managers are required to have systems for recording
all transactions in electronic form pertaining to vaulting services.They need to maintain the documents to ensure that gold is traceable;
details of storage, transfer and withdrawal of gold; purity, quantity and weight of deposited gold; and creation and extinguishment of
EGRs.Further, they need to preserve these records and documents for a minimum period of five years
desirous of creating EGRs will have to place a request for the deposit of the gold with the registered vault manager, who will ensure
compliance with the gold standard, weigh the gold bars and check necessary documentation at the time of deposit of gold.The vault manager or
any person authorised on this behalf will ensure that the gold is deposited only through an accredited refinery or a nominated agency.On
EGR.Upon acceptance of the gold from the depositor, the vault manager will create an EGR in the name of such depositor as beneficial owner
by entering details in the common interface.In respect of withdrawal of gold, the regulator said the beneficial owner seeking to withdraw
gold from the vault will have to place a request with the depository.
