Page 5 - Bullion World Issue 7 November 2021

Bullion World | Issue 07 | November 2021

EDITORIAL

Dear Readers,

Hope you all are in good health.

After the pilot run, the International Bullion exchange will be soon
functional. The Securities and Exchange Board of India (SEBI) has
fleshed out a proposal for a gold exchange. As we know, India has a
demand of 800-900 tonnes of Gold annually and being a big importer,
the country was in an absolute need for liquid spot market.

So, how will Gold be traded in the new framework? It’s a blur question
which every domestic player has in their mind. Talking about it in nutshell we see that, there should
be a common interface developed between the vault manager, depositors, stock exchanges and
clearing corporations. The source of supply of the physical Gold should be converted in form of
electronic gold receipts (EGRs). It should be a fresh deposit coming to the vaults from either through
imports or through stock exchange/s accredited domestic refineries. The existing deposit of gold
lying in the vaults, which meets the aforesaid source criteria and has never been out of the vaulting
infrastructure, may be transferred to the instant vault for conversion the depositor (or owner of the
gold) intending to convert his/her physical gold into EGR and trade on the stock exchange/s, shall
ensure delivery of such gold to the vault manager. The vault manager then shall record relevant
information, in the common interface and shall create the EGR. The vault and storage part will
be maintained by SEBI and the vault manager and SEBI registered depositaries will facilitate the
issuance of EGR’s against the physical Gold. The denomination of EGR’S will be 1kg, 100gm, and
50gm with endless validity. So, according to SEBI, Gold exchange would be the national platform
for buying and selling of EGR’s with underlying standardized gold in India.

The Gold exchange has to offer a host of benefits for the value chain participants as well as the
entire gold market ecosystem, such as transparent and efficient price discovery and assurance in
the quality of Gold. A combination of both the international and domestic market would lead to
better, effective and efficient marketplace which was long pending.

This issue of Bullion World is a special edition released on the occasion of India Gold Conference
2021 with rich & relevant content. This issue covers the Initiatives and activities taken up by IBJA for
the Gold industry under the able leadership of Mr. Prithviraj Kothari. We have covered the challenges
which are faced by the industry in HUID hallmarking and its prospects. On the international front
we have ASEAN Gold industry update from SBMA. There is an update on UAE market from DMCC.
On Responsible Sourcing side, Ms Sakhila Mirza of LBMA has shared the advancing standard of RSP.

The countdown has started and our entire team is preparing in full swing for the India Gold
Conference keeping in mind the Covid protocols. It would be wonderful to meet you all after a long
time. No doubt we had a very tough time in past and our support remains with those who served
us, be it front line workers of Covid or the people who are still suffering due the effects of Covid.
We hope you will enjoy this edition Bullion World. If you have anything interesting information to
share, please write to us at editor@bullionworld.in. Till then take care of yourself.

Best wishes,
Neelambari Dasgupta

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