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The BSE has Received Final Approval from SEBI to Launch EGR on its Platform

BSE

The Securities and Exchange Board of India (SEBI) has given final approval to the stock exchange BSE to launch the Electronic Gold Receipt (EGR) segment.

The capital markets regulator Securities and Exchange Board of India (SEBI) has given final approval to stock exchange BSE to introduce the Electronic Gold Receipt (EGR) segment on its platform. Following Sebi’s in-principle approval in February.
The exchange conducted several mock trading sessions in the test environment for exchange members to facilitate trading in EGRs.

What is EGR in BSE

The gold-representing instruments will be known as EGRs, and they will be notified as securities, with trading, clearing, and settlement features similar to other securities currently available in India. The SEBI board had previously approved a proposal for gold exchange. In which the yellow metal will be traded in the form of EGRs, facilitating a transparent domestic spot price discovery mechanism.
India currently only trades gold derivatives and gold ETFs. In contrast to several other countries that have spot exchanges for physical gold trade.

According to the BSE, EGRs will be available to all market participants, which means that buyers and sellers on the exchange. It will include both individual investors and commercial participants along the value chain. Such as importers, banks, refiners, bullion traders, jewelry manufacturers, and retailers.

“We are extremely grateful to SEBI for giving us the final approval and confidence that we will be able to launch trading in EGR soon, as gold holds special significance for Indian households,” said Sameer Patil, chief business officer of the BSE. The BSE is confident that the EGR platform will result in greater assurance in the quality of gold supplied, more efficient price discovery, and greater transaction transparency. This can help to create a thriving gold ecosystem in India by allowing gold to be fungible.

India world’s second-largest gold consumer

India is the world’s second-largest gold consumer, with an annual gold demand of approximately 800-900 tonnes, and it plays an important role in global markets.
BSE is collaborating with all depositaries and vaults to ensure the development of the entire ecosystem surrounding EGR trade, including depositaries, vault managers, traders, bullion dealers, and jewellers.
So that EGRs can contribute significantly to the development of a transparent channel for gold trade on a national formalised platform.
India 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.

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