BSE launched Electronic Gold Receipts

BSE launched Electronic Gold Receipts: The BSE has introduced the Electronic Gold Receipt (EGR) on its platform, which will aid in the efficient and transparent price discovery of the yellow metal. During the Muhurat trading on Diwali, the exchange has introduced two new products of 995 and 999 purity, with trading in multiples of 1 gram and deliveries in multiples of 10 grams and 100 grams.

What is Electronic Gold Receipt?

• Electronic Gold Receipts are digital receipts that were created based on a deposit of physical gold. EGR enables effective gold standardization and price determination, transaction transparency, support for the India Good Delivery Standard, and settlement guarantee to investors.
• A national marketplace for buying and selling EGRs issued against physical gold would be called Gold Exchange.
• A proposal for a gold exchange, where the yellow metal will be traded in the form of EGRs and contribute to having a transparent domestic spot price discovery mechanism, had previously been approved by Sebi.
• A platform for EGR would eliminate current market inefficiencies and inject transparency into gold spot transactions, allowing India to emerge as the price-setter.
• Greater assurance of the supplied gold’s quality, effective price discovery, and transaction transparency can all be guaranteed by the EGR platform.

Who can invest in Electronic Gold Receipts?

All market participants will be catered to by EGRs, so buyers and sellers on the exchange will include both individual investors and business participants along the value chain, such as importers, banks, refiners, bullion traders, jewelry manufacturers, and retailers.

What is the significance of EGR?

• EGR uses an exchange with transparent pricing and liquidity to persuade people to not stockpile gold.
• India is a net gold importer. We do not set prices; rather, we take prices. Moving from being price takers to price setters is the entire point.
• Thus, price transparency in the gold market will result from price discovery at the exchanges.
• The transparent price discovery, investment liquidity, and assurance of gold’s quality would all be provided by the gold exchanges.

About BSE

• The first and fastest stock exchange in Asia, BSE, was established in 1875 and was originally known as the Bombay Stock Exchange.
• It is the largest exchange group in India. For trading in equity, debt instruments, equity derivatives, currency derivatives, commodity derivatives, interest rate derivatives, mutual funds, and stock lending and borrowing, BSE offers an effective and transparent market.
• BSE founded India INX, the country’s first international exchange, which is located in Ahmedabad’s Gift City IFSC.
• The Bombay Stock Exchange was founded by Premchand Roychand.