Context:
India Bullion & Jewellers Association (IBJA) urges regulators to allow Indian-refined gold and silver bars (“India Good Delivery”) for:
- Multi-Commodity Exchange of India (MCX) contracts
- Gold and silver exchange-traded funds (ETFs)
About MCX
- Multi Commodity Exchange of India Ltd. (MCX): India’s largest commodity derivatives exchange, regulated by SEBI.
- Provides nationwide trading in commodity futures like bullion, energy, base metals, and agri-commodities.
- Headquartered in Mumbai, plays a key role in price discovery and risk management for commodities.
Current Scenario:
- MCX: Allows delivery of 100g Indian-made gold bars but not for 1kg benchmark contracts.
- ETFs: Backed by LBMA-approved imported bars.
- Indian Good Delivery Bars: Refined in BIS- and NABL-approved facilities, quality comparable to LBMA bars.
Gold & Silver ETFs in India
What are ETFs?
- Exchange Traded Funds (ETFs): Marketable securities traded on stock exchanges, just like shares.
- They track the price of an underlying asset (e.g., gold, silver, equity index).
- Provide diversification, transparency, and liquidity to investors.
Gold ETFs
- Introduced in India: 2007.
- Backed by physical gold, stored with SEBI-approved custodians.
- Each unit usually represents 1 gram of gold.
- Prices are linked to domestic gold rates, adjusted for fund expenses.
Silver ETFs
- Introduced in India: 2021 (SEBI permitted AMCs to launch them).
- Backed by physical silver, eliminating storage/impurity risks of physical silver.
- Units represent a fixed quantity of silver, held in demat form.
