NSE likely to introduce Electronic Gold Receipt

The National Stock Exchange is likely to introduce trading of electronic gold receipts on its platform and market regulator SEBI is ironing out some taxation issues related to the product with the government, an official said on Thursday.

Referring to the Electronic Gold Receipt (EGR), V S Sundaresan, Executive Director at the Securities and Exchange Board of India (SEBI), said, this product has been introduced by SEBI and BSE has launched it about a month back and “we hope that this product will definitely gain traction over a period of time”.

“Under this product, what is proposed is that the physical gold is to be deposited in a vault, that vault manager will issue an electronic receipt and this will be credited to the demat account of the investor, that receipt can be traded on the stock exchange,” he explained.

So the gold will remain in a vault but it will generate some sort of income and the unutilised gold can be put to productive use, Sundaresan added.

The Bombay Stock Exchange launched EGR trading on its platform.

It introduced two new products of 995 and 999 purity during the Muhurat trading on Diwali. Trading can be done in multiples of 1 gram and deliveries in multiples of 10 gram and 100 gram, the exchange had said in a statement.

“It is a new segment. The BSE has come forward. The NSE is likely to do it shortly. We are working on the proposal,” Sundaresan said.