IND IFSCA Bullion Exchange Regulation

On Jun. 10, IND IFSCA proposed revised bullion exchange regulations.

  • IND IFSCA proposed amendments to IFSCA (bullion exchange) regulations, 2020.
  • Amendments
  • Aims to align some of the provisions of the bullion exchange regulations with market infrastructure institutions regulations (see #96970) for consistency in MII framework.
  • Amendments are proposed in the areas of requirements for grant of recognition to a bullion clearing corporation, shareholding, record keeping, governance, trading hours.
  • As well as risk management, halting of trading by bullion exchange, co-location by bullion exchange, business continuity plan, vault managers, depository receipts, etc.
  • Effectiveness
  • Comments may be submitted by Jun. 21, 2021.
  • Jul. 2021 Amendments Published
  • On Jul. 6, 2021, IND IFSCA said International Financial Services Centres Authority (bullion exchange) (amendment) regulations, 2021 were published in official gazette.
  • Aug. 2021 Exchange Pilot Launch
  • On Aug. 18, 2021, IND IFSCA said it launched the pilot run of the international bullion exchange on Aug. 18, 2021, and said it is scheduled to go live on Oct. 1, 2021.
  • International bullion exchange shall be the gateway for bullion imports into India, wherein all bullion imports for domestic consumption shall be channelized through it.
  • The exchange ecosystem is expected to bring all the market participants at a common transparent platform for bullion trading and provide an efficient price discovery, etc.
  • Pursuant to MoU between NSE, MCX, IFSC, NSDL, CDSL the holding company India International Bullion Holding IFSC Ltd. (IIBH) has been created for set up, operations.
  • IND IFSCA has approved the application by the holding company for setting up the international bullion exchange through the subsidiary of the holding company.
  • CDSL-IFSC, a foreign depository has been designated as the bullion depository for the bullion exchange responsible for managing the vault manager.
  • Sep. 17, 2021 Onboarding
  • On Sep. 17, 2021, IND IFSCA permitted all members of the stock exchanges and clearing corporations in GIFT-IFSC to be enabled as bullion trading/clearing members.
  • Subject to the fullfilment of requisite net worth criteria as specified by the authority.
  • New entities who intend to become bullion trading/clearing members shall follow the membership criteria and registration process for membership subject to criteria.
  • Outlines net worth criteria and base minimum capital and any additional requirements.
  • Sep. 20, 2021 FAQ
  • On Sep. 20, 2021, IND IFSCA issued FAQs on international bullion exchange, providing clarity on relevant matters, on the basis of deliberations and external consultations.
  • Jun. 2022 Liberalized Remittance Scheme
  • On Jun. 17, 2022, IND IFSCA clarified on investment in bullion depository receipts (BDR) on IFSC (IIBX) through the liberalized remittance scheme (LRS) route.
  • Remittances to IFSCs in India under the scheme, permitted by RBI, see #98266, allows residents to make remittance in IFSCs in India only for making investments in IFSCs in securities, other than those issued by entities/companies resident in India.
  • In this regard, it is clarified that, resident individuals are not permitted to transact/ invest in BDR on IIBX through the liberalized remittance scheme route.
  • In Jul. 2022, IND IFSCA launched India International Bullion Exchange, see #144732.
  • Dec. 2022 Recognition Renewal
  • On Dec. 6, 2022, IND IFSCA renewed recognition of India International Bullion Exchange as Bullion Exchange and Bullion Clearing Corporation for one year.
  • The year commences on Dec. 9, 2022 and ends on Dec. 8, 2023, in respect of bullion spot delivery contract and bullion depository receipt with underlying bullion.
  • IND IFSCA is satisfied it is in the interest of trade, bullion market and public to renew.
  • Document dated Dec. 6, 2022, received from IFSCA Jan. 11, summarized on Jan. 12.
  • Jan. 2023 Extension
  • On Jan. 27, 2023, IND IFSCA extended application of net worth requirement for initial 6 months from the date of operationalization of Bullion Exchange until Jul. 28, 2023.
  • In addition, the base minimum capital for initial 6 months from the date of operationalization is also extended for an additional six months until Jul. 28, 2023.
  • Aug. 2023 Extra Extension
  • On Aug. 7, 2023, IND IFSCA extended application of net worth requirement by a further period of 6 months or until IFSCA issues revised guidelines/handbook/circular specifying the requirements of minimum net worth and base minimum capital.
  • The additional six months ends on Jan. 28, 2024.
  • Feb. 2024 Extended Further
  • On Feb. 22, 2024, IND IFSCA extended the period by 6 months until Jul. 28, 2024.
  • Or until the time that IND IFSCA issues revised guidelines/handbook/circular specifying the requirements of minimum net worth and base minimum capital.

Regulators IND IFSCA
Entity Types B/D; Corp; Depo; Exch; IA
Reference Cir 329/IFSCA/Bullion MIIs/2023-24/04, 2/22/2024; Cir F. No. 329/IFSCA/Bullion MIIs/2023-24/01, 8/7/2023; Cir F. No. 329/IFSCA/Bullion MIIs/2022-23, 1/27/2023; OG 329/IFSCA/Bullion MIIs/2021-22, 12/6/2022; Cir 329/IFSCA/DPM/TS/2022-23/1, 6/17/2022; FAQ 9/20/2021; Cir F. No. 329/IFSCA/Bullion MIIs/2021, 9/17/2021; PR 8/18/2021; OG IFSCA/2021-22/GN/REG014, 7/6/2021; CP 6/10/2021
Functions BCS; Compliance; Financial; Market Conduct; Operations; Record Retention; Registration/Licensing; Reporting; Risk; Settlement; Trading
Countries India
Products Clearing; Commodities; Corporate; Equity; Fund Mgt; Securities
Regions AP
Rule Type Final
Rule Date 6/10/2021
Effective Date 7/28/2024
Rule Id 108000
Linked to N/A
Reg. Last Update 2/22/2024
Report Section International

Last substantive update on 02/27/2024