SEBI Expands Vault Rules to Cover Gold, Silver ETFs — SkimNews
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- SEBI approved amendments to its Vault Managers Regulations at its 215th board meeting on Thursday, expanding the scope beyond Electronic Gold Receipts (EGRs) to include bullion underlying gold and silver ETFs and bullion derivatives
- The 2021 Vault Managers Regulations were originally designed for gold backing EGRs and covered registration, safekeeping, insurance, purity checks, record-keeping, and reconciliation
- Gold and silver ETFs were previously governed only under the mutual fund framework for their underlying bullion holdings, not under the vault managers rules
- The revised framework aims to create a common regulatory structure across SEBI-specified bullion-related instruments as India's bullion market evolves with new products like ETFs and derivatives
- SEBI will issue a consequential circular to operationalize the amended framework; the changes do not alter how investors buy, sell, or hold gold or silver ETF units
Why it matters: Gold and silver ETF investors gain uniform oversight of how the physical bullion backing their units is stored, insured, and reconciled, replacing a lighter mutual fund framework with the stricter 2021 vault rules. SEBI has not specified when the new framework takes effect, pending a consequential circular — so the practical shift is regulatory tightening without any change to how investors transact.
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