Gold Exchange, Social Stock Exchange Frameworks Approved By SEBI Board
Among a slew of important decisions, the Securities and Exchange Board of India also approved frameworks for gold exchange and social stock exchange at its board meeting on Sept. 29.
The other noteworthy decisions include making it easier for acquirers to delist after a mandatory open offer, expanding the definition of related party and related-party transactions and relaxing provisions applying to superior voting rights shares.
A SEBI statement said, in keeping with India's large share of global gold consumption, "the Gold Exchange would be a national platform for buying and selling Electronic Gold Receipts with underlying standardised gold in India and also create a national pricing structure for gold".
The benefits of such an exchange would be
efficient and transparent price discovery
assurance in the quality of gold, etc.
The key features of the Gold Exchange and SEBI (Vault Managers) Regulations, 2021 are;
-- The instrument representing gold will be called Electronic Gold Receipt (EGR).
-- It will be notified as a security under the Securities Contracts (Regulation) Act, 1956.
-- EGRs will be traded, cleared and settled like other securities.
-- Any recognised stock exchange, existing or new, can launch trading in EGRs in a separate segment.
-- An EGR can be held for as long as intended as it will have perpetual validity.
-- An EGR holder can withdraw the underlying gold from the vaults by surrendering the EGR.
The SEBI board also approved the framework for SEBI (Vault Managers) Regulations, 2021.
Social Stock Exchange
The SSE shall be a separate segment of the existing stock exchanges. Non Profit Organisations and For-Profit Social Enterprises can participate in an SSE, as long as they are engaged in any of the 15 eligible social activities approved by SEBI.
NPOs can raise funds through equity, zero coupon zero principal bonds, mutual funds, social impact funds, and development impact bonds, according to the SEBI media release.
SEBI will have to amend several regulations to provide for disclosure and governance of such enterprises as well as enable their fund raising, listing etc.
A social audit will also be mandated for such enterprises. A separate sustainability directorate under ICAI is envisaged - as a self regulatory organisation for such social auditors.