The International Financial Services Centres Authority (IFSCA) on Tuesday approved regulations on bullion exchange, paving the way for setting up an entire ecosystem for bullion trading, namely– bullion exchange, depository, clearing house, and vaults in Gujarat’s Gift City, the country’s sole international financial services centre (IFSC).
The Bullion Exchange Regulations seeks to provide an integrated platform for all the market intermediaries including trading members/clearing members, bullion depositories, and vault managers, so as to facilitate transparency and traceability in the bullion market and standardisation of bullion contracts.
This is the first time in India a single regulator (IFSCA), which has the responsibility of operationalising the bullion exchange, will regulate both the bullion spot and derivative contracts that would be traded on the Exchange.
It maybe recalled that the central government, on the recommendations of the IFSCA, had on August 31 notified the bullion spot delivery contract and bullion depository receipt (with bullion as underlying) as Financial Products and related services as Financial Services under the IFSCA Act, 2019.
At IFSCA’s board meeting, chaired by Injeti Srinivas, Chairman of IFSCA, on Tuesday, the draft bullion regulations were approved.
The salient aspects of the Bullion Exchange Regulations include:Functions and general obligations of a bullion exchange and clearing corporation; Ownership and governance structure of a bullion exchange and clearing corporation; Rights and Obligations of Bullion Depositories, Participants and Beneficial Owners; The grant of registration to a vault manager by the Authority and Role of bullion depositories besides other operational aspects of the bullion exchange
Global in house centres
At IFSCA’s Board meeting on Tuesday, the regulations for Global in -house Centres(GICs) were also approved. In recent years, GICs in India have been contributing to development of highly skilled talent pool in the country.
India is emerging as world’s leading centre of digitization, with one of largest pool of digital talents. These GIC regulations issued by IFSCA has the potential to put GIFT-IFSC in the leagues of leading FinTech cities, generating significant employment opportunities.