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India's first International Bullion Exchange will take shape by the end of this year and the market infrastructure institutions (MIIs) will form a consortium to make a single entity operating the bullion exchange. “The regulations for the international bullion exchange have been notified and the international bullion exchange will come up by this year,” informed Injeti Srinivas, Chairman IFSC Authority on Friday.
The Chairman of the unified regulator of the IFSCs stated that the Exchange will operate with delivery-based model for allocated and unallocated bullion. However, there will be underlying security backing the unallocated bullion, Srinivas further added.
V. Balasubramaniam, MD & CEO India INX, said the upcoming Exchange will be a single entity owned by a consortium of Market Infrastructure Intermediaries (MIIs).
“We are forming a single consortium for International Bullion Exchange. All MIIs including BSE, NSE, MCX, NSDL, CDSL together to own this consortium. In-principle we we have taken this call and we are in the process of finalising the framework,” said Balasubramaniam adding that BSE Group would look to make India INX a hub for participating in all the ventures within the IFSC.
To enter exclusive club
The bullion exchange is seen as a big growth driver for GIFT-IFSC, which will open the doors for India to enter an exclusive club of bullion trading nations.
Entire bullion/gold value chain starting from importers, refinement, storage, further onward sales in domestic areas will be developed here. Stakeholders including retail, wholesaler, bankers will benefit by active price discovery mechanism within India. Last month, Sequel Logistics had commenced its precious commodities vault for storage of Gold & Silver, at GIFT IFSC.
Eyeing banks, institutions
Besides the Bullion Exchange, Srinivas also stated that a lot of streamlining of regulations and innovation is taking place to make GIFT-IFSC a preferred destination for existing established international financial institutions and funds.
“We can look to have 100 plus banks and over 500 fund management institutions of all sizes and then with the growth in the economy, other opportunities in reinsurance and retail insurance will grow too and they will feed into each-other,” Srinivas said adding that the most important focus area is to get the fund management industry to GIFT-IFSC.
He said the target is not to relocate lot many players, but at least some India-centric businesses can come to GIFT IFSC. India's first IFSC now has a unified regulator having powers under 14 central acts and one of its own act.
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