3 weeks ago
Sebi proposes expanding vault manager rules to bullion ETFs
In India, a group called Sebi makes sure investing is safe and fair.
Sebi has special rules for vault managers, which are companies that keep gold safe in locked vaults.
Right now, those rules mainly cover gold that backs Electronic Gold Receipts, a digital way of proving you own gold.
Sebi now wants to expand the rules to cover gold and silver behind other investment products, like ETFs and bullion derivatives.
This means the same safety rules would apply to more kinds of gold and silver investments.
Vault managers are responsible for receiving, storing and safeguarding the gold.
They also help create and cancel Electronic Gold Receipts.
The rules cover things like registration, insurance, audits and keeping good records.
If the plan goes ahead, investors can feel safer knowing their gold is protected no matter which product it backs.
Sebi has proposed expanding the vault manager regulatory framework to cover physical bullion underlying gold and silver ETFs and bullion derivatives.
The proposal is part of a review and expansion of the Sebi (Vault Managers) Regulations, 2021, aiming for a harmonised vaulting framework for all bullion underlying Sebi-regulated products.
Under the proposed framework, vault managers would cover gold, silver and other precious metals underlying Electronic Gold Receipts (EGRs), bullion ETFs, bullion derivatives and other bullion-related instruments.
Currently, the vault manager framework primarily governs the storage and safekeeping of physical gold underlying EGRs traded on recognised stock exchanges.
The 2021 regulations prescribe requirements on registration, governance, net worth, risk management, internal controls, insurance, record maintenance, reconciliation, audit, grievance redressal and business continuity.
- Who
- Sebi, India's markets regulator
- What
- Proposed expanding the vault manager framework to cover physical bullion underlying bullion ETFs, derivatives and other bullion-related products
- Where
- New Delhi, India
- When
- Not specified in the article
- Why
- To extend storage and safekeeping safeguards to all bullion underlying Sebi-regulated products through a harmonised vaulting framework
Key facts
- Regulator
- Sebi (Securities and Exchange Board of India)
- Proposal
- Expand vault manager framework to cover bullion ETFs, bullion derivatives and other bullion instruments
- Regulatory basis
- Sebi (Vault Managers) Regulations, 2021
- Current scope
- Storage and safekeeping of physical gold underlying Electronic Gold Receipts (EGRs)
- Proposed scope
- Physical gold, silver and other precious metals underlying EGRs, bullion ETFs, bullion derivatives and other bullion-related instruments
- Vault manager duties
- Receiving, storing and safeguarding gold; facilitating creation and extinguishment of EGRs
- Prescribed requirements
- Registration, governance, net worth, risk management, internal controls, insurance, record maintenance, reconciliation, audit, grievance redressal, business continuity
- Location
- New Delhi
Sources
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