He said the EGR was introduced to create a regulated market for gold trading and position India as a global price discovery center for the precious metal.
Speaking at an event organized by the Commodity and Capital Participants Association of India (CPAI), Pandey said, “EGR was intended to create a regulated market for gold trading and establish India as the global gold price setter. While a review of the EGR framework may be required, I urge the industry to educate its participants and investors to deal only in regulated gold products.”
“I think there are GST challenges around it,” a PTI report quoted Pandey as saying.
Pandey said the regulator is analyzing the structural, operational and regulatory challenges that have limited the adoption of EGR, Money control informed.
Investors can buy regulated gold products in the form of commodity derivatives, gold ETFs and EGRs.
The SEBI chief highlighted that these regulated products ensure investor protection.
The market regulator recently warned against digital or online platforms offering gold products to investors, as they pose significant risks to investors and may expose them to counterparty or operational risks.
“It has come to SEBI’s attention that some digital/online platforms are offering investors to invest in ‘digital gold/e-gold products’. Digital gold is being marketed as an alternative to investing in physical gold. In this regard, it is hereby informed that such digital gold products are different from SEBI-regulated gold products as they are neither denominated as securities nor act as regulated products other than pure commodities. Scope of SEBI,” said a media release issued last month.
Also Read: SEBI warns investors against unregulated platforms offering digital gold products
Pandey also cited downside pressures faced by commodity markets amid rising risks such as geopolitics, sanctions, weather shocks and data-center demand.
“Robust commodity derivatives markets are needed to convert this price volatility into manageable risk. Markets establish fair values that reflect future expectations. This transparent pricing is the highest form of market integrity,” he added.
SEBI has undertaken a set of regulatory reforms for ease of doing business, including reducing the staggered delivery period from a minimum of five working days to three working days.
Also Read: SEBI approves new stockbrokers rules to ease compliance framework 10 key remedies
Pandey said the recently approved new stockbroker rules will enhance ease of compliance by ensuring simple language and overall structured provisions.
(disclaimer: Recommendations, suggestions, opinions and views given by experts are their own. (These do not represent the views of the Economic Times.)
As a trusted and reliable news source
Add now!
(You can now subscribe to our ETMarkets WhatsApp channel)
