Government of India vide Gazette notification S.O. 5401 (E) dated December 24, 2021, has declared “Electronic Gold Receipts (EGR)” as ‘securities’ under Section 2(h)(iia) of the Securities Contracts (Regulation) Act 1956 (SCRA)
“Vault Manager” is regulated as a SEBI intermediary for providing vaulting services in relation to gold storage and safekeeping of gold deposited with the Vault Manager by the depositor for the purpose of trading in Electronic Gold Receipts.
The Vault Manager, on receipt of physical gold from the demat account holders, records the relevant information in the depository system and creates the EGR. The EGR shall reflect in the demat account of the beneficial owner maintained with the Depository Participant and it can be traded on the recognized stock exchange. Further, Investors holding EGR units in their demat account can convert them back into physical gold.
