New Delhi: Market Regulator Sebi has told the rules for Vault managers who enable the exchange to regulate gold exchanges in this country.
This happened after the SBI Board cleaned the proposal in September to establish a gold exchange, where the yellow metal would be traded in the form of electronic gold and exchanges will assist in having a transparent domestic price discovery mechanism.
The instrument that represents gold will be called electronic gold receipt (EGRS) and will be notified as a securities.
EGR This will have trade features, clearing and solving similar to other securities.
Gold exchanges, which include all EGR trade ecosystems and physical delivery of gold, are expected to create a dynamic gold ecosystem in India.
In the notification on December 31, the regulator said Vault manager would be registered and arranged as an intermediary for providing dome services intended for deposited gold to create EGR.
The obligation of Vault managers includes receiving deposits, storage, and storage of gold, creation and EGR withdrawal, redressal complaints and periodic physical gold reconciliation with storage records.
Anyone who wants to run a business as a Vault manager can make an application for a registration certificate.
Pursuing the feasibility criteria, Sebi said the applicant would be a legal entity incorporated in India and would have a minimum net value of Rs 50 Crore.
Each registration certificate given will be valid unless deferred or canceled by Sebi.
“Where Vault managers carry out any activity other than what is stipulated in this regulation, the activities related to their business as managers of Vault will be separated and separated from all other activities including presenting separate spaces for EGR storage to be stored and storing goods for other businesses , “Sebi said.
Vault managers are required to have a system to record all transactions in electronic forms related to dome services.
They need to maintain documents to ensure that gold can be tracked; Details of storage, transfers, and gold withdrawals; Purity, quantity and weight of the paid-up gold; and EGRS creation and blackouts.
Furthermore, they need to preserve these records and documents for a minimum period of five years.
Also, they need to comply with the code of ethics determined by the regulator.
With regard to gold deposits into the dome, Sebi said everyone who wants to create EGR will have to submit a request for gold deposits with Registered Vault managers, which will ensure compliance with the gold standard, weigh gold bars and check the documentation needed at the time of the gold deposit.
Vault manager or any person who is authorized in this name will ensure that gold is saved only through an accredited refinery or a nominated body.
With regard to EGR creation, Sebi said that every Vault manager will have a common interface with storage for EGR creation and blackouts.
After the gold receipt from Depositan, Vault manager will make EGR on behalf of the depositors as a profitable owner by entering details in the general interface.
In connection with the withdrawal of gold, the regulator said the profitable owner who tried to attract gold from a vault must make a request with storage.
Storage, after fulfilling the payment of fees because Vault manager will prioritize his approval for the withdrawal of gold to the manager of the Vault concerned.
After receiving communication from storage, the Vault manager will hand over gold and extinguish EGR.
Regulators have the right to conduct account books, records, documents and gold deposits Vault managers to check into the affairs of the manager for the benefit of the securities market, among others.
Before ordering an inspection, the regulator must have a notification of at least 10 days to the Vault manager.
New norms called Effects and Exchange Board of India (SEBI) Regulation Manager Vault has been valid since December 31.
Presenting the budget for 2021-22, Minister of Finance Nirmala Sitharaman said that Sebi would become a regulator for gold exchanges and the development of warehousing and supervisory authorities (WDRA) would be strengthened to regulate commodity market ecosystems.