Finance
The BSE has launched Electronic Gold Receipts (EGR) on its platform, which will aid in the efficient and transparent price discovery of the yellow metal. The exchange said in a statement that it introduced two new products of 995 and 999 purity during Muhurat trading on Diwali, and that trading will be in multiples of 1 gram, with deliveries in multiples of 10 gram and 100 gram.
The announcement comes after the exchange received final approval from the Securities and Exchange Board of India (Sebi) to implement EGR on its platform last month. BSE received in-principle approval from Sebi in February, following which the exchange conducted several mock trading sessions in the test environment for its members to facilitate trading in EGRs.
EGRs will cater to all market participants, which means that buyers and sellers on the exchange will include individual investors, as well as commercial participants along the value chain like importers, banks, refiners, bullion traders, jewellery manufacturers, and retailers. “The launch of EGRs represents a significant milestone not only for the BSE but also for the global bullion industry. BSE is committed to continuously facilitating access to high-quality investment-based products and services for our stakeholders,” Sameer Patil, CBO at BSE said on Monday.
The EGR platform will result in greater assurance in the quality of gold supplied, more efficient price discovery, and greater transaction transparency. By making gold fungible, this can help to create a thriving gold ecosystem in India. India is the world’s second largest gold consumer, with an annual gold demand of approximately 800-900 tonne, and it plays an important role in global markets.
The country has remained a price taker in global markets and does not currently play a significant role in influencing commodity price setting. A platform for EGR adds transparency to gold spot transactions, allowing India to emerge as the price setter, and eliminating existing market inefficiencies.
Source:FE
