EGR will be kept in demat account like shares
Investing in gold has always been a reliable option for Indian investors. But the worry of buying physical gold, testing its purity and keeping it safe often troubles investors. With the aim of eliminating this problem forever, the National Stock Exchange (NSE) has taken a big step. Live trading of Electronic Gold Receipt (EGR) segment has started in the stock market. This means that now you will be able to easily buy and sell real gold through the stock market like the stock of any company. Earlier, the exchange had conducted its mock trading session on 16th May which was completely successful. Now the live system is also working smoothly without any technical interruption.
buy pure gold like shares
EGR is actually a very modern digital option to invest in gold. Through this, any investor can buy and sell gold directly from the stock exchange. On this platform, trading facility is provided in high purity gold ranging from 99.9 percent (999) to 99.5 percent (995). The gold available here is completely ‘fungible’, which means that investors do not have to bear the hassle of checking the quality every time. With the option of trading in different denominations, small retail investors as well as big investors can invest in the market as per their capacity.
This method is completely different from Gold ETF
The model of EGR is quite different compared to the gold ETFs already present in the market. An ETF basically works like a mutual fund unit, which simply tracks the market prices of gold. In this you never get delivery of real gold. On the other hand, by investing in EGR, you directly get ownership of the physical gold kept in a secure vault. If you need physical gold in future, you can easily convert your digital holding into physical gold bars.
Safe trading will be done under the supervision of SEBI
This entire trading system will be regulated by the market regulatory body SEBI. It has officially got the status of ‘security’ under the ‘Securities Contracts Regulation Act 1956’. Many institutions will work together to ensure the safety of investors. While the exchange will provide the trading platform, the clearing corporation will settle the deals and money between the buyer and the seller. Your EGR receipts will remain completely safe in the demat account with the depository. Apart from this, the vault manager will have the entire responsibility of safekeeping, deposit as well as withdrawal of physical gold.
One price of gold across the country
The trading timings of EGR have been fixed from 9 am to 11:30 or 11:55 pm from Monday to Friday. This slight change in time may be according to American daylight saving. Like shares, its settlement will be based on ‘T+1’ rule, that is, the settlement will be completed on the next business day on the day the trade takes place. The biggest benefit of this system will be seen in the form of ‘One Nation, One Price’. The difference in gold prices in different states of the country will be eliminated through exchange based transparent trading. The same price of gold will be applicable throughout India. At present, apart from Ahmedabad and Mumbai, vaulting centers have also been started in Delhi, Kolkata, Chennai and Bengaluru. The exchange is soon planning to create a huge network of about 120 such centers across the country.
