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Market regulator Sebi has allowed spot gold exchanges to trade in electronic gold receipts (EGR) from 9 am to 11.30 pm with pre-open session for 15 minutes from 8:45 am.
Earlier, one of the oldest stock exchange BSE had claimed that it has received Sebi approval for trading in EGR.
Price bands in EGR segment
With the view to ensure orderly trading and protect market integrity, stock exchanges would implement a mechanism of price bands in the EGR segment to prevent acceptance of orders for execution placed beyond the price limit set by the stock exchanges, said Sebi in a circular laying out detailed operation guidelines for them.
The initial price limit for the price band shall be set at 10 per cent of the previous close and the dynamic price band can be relaxed by the stock exchanges in increments of 5 per cent.
Stock exchanges shall frame suitable rules with mutual consultation for such relaxation of dynamic price bands and shall make it known to the market.
In the event of exceptional circumstances, when there is extreme price movement beyond the initial price limit in the international markets, stock exchanges can relax the price band directly by giving appropriate notice to the market, said Sebi.
Vault managers service
Entities interested in providing vault manager service should make fixed security deposit of ₹10 lakh with either NSDL or CDSL before obtaining a certificate of registration from Sebi. This is the minimum security deposit which has to be maintained with Depository at all points of time, said Sebi.
The Depository and the Vault Manager has to devise procedures for carrying out reconciliation between the stock of physical gold deposited with the recognised vaults and the corresponding electronic record of EGRs in the Depository system at the end of day on a daily basis.
The Vault Manager has to allow withdrawal of gold from 10 am to 3 pm.
The requests for withdrawal of gold made into the recognised vault has to be processed by the Vault Manager on the same working day, said Sebi.
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