Sebi to regulate gold exchange

The finance ministry has decided that the proposed gold exchange will be regulated by the Securities and Exchange Board of India (Sebi). In a meeting of all stakeholders in New Delhi on Monday, tardy progress of gold monetisation scheme was also discussed.

While a proposal to set up National Bullion Board — an umbrella body for gold policies — has been delayed, a separate meeting would be held soon on better implementation of gold monetisation scheme.

Sources said the finance ministry has already asked Sebi to take the gold exchange issue forward. With this, markets are expecting all regulations, including ownership related, to be as per Sebi norms. The meeting attended by government officials, banks and bullion industry representatives.

Tardy progress of gold monetisation scheme after almost four months of launch was also discussed. Banks, collecting centres and hallmarking centres are largely staying away despite several clarifications from the Reserve Bank of India and the government.

Earlier, there were opinions that gold spot market is not regulated and hence gold exchange can not be regulated. On Monday, government said that spot agri markets are under states but gold is not, therefore Centre can decide about gold trading. “Finance Ministry has asked Sebi to consider proposal of Bombay Stock Exchange to set up gold exchange along with Indian Bullion Jewellers Association (IBJA),” a source said.

Now, the issue is to be decided by BSE and Sebi. The BSE and IBJA had also appointed Ernst & Young to recommend roadmap for the exchange. The consultant has already submitted an interim report, based on which a proposal has been sent to the government. Sebi may consider the proposal soon. A study conducted by Indian Institute of Management, Ahmedabad on gold exchange was also discussed. However, only Sebi is going to take any final decision in this regard. Sebi officials were not part of the meeting.