Gold Exchange: The Board of Directors of SEBI has approved the proposal regarding the framework for the formation of Gold Exchange. In this market gold can be bought and sold in the form of electronic gold receipt.

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 will be called Electronic Gold Receipt (EGR) and it will be notified as securities.

 He said that like any other security, EGR will have arrangements for trading, clearing and settlement.

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.

Source News By: Ndtv.