The International Financial Services Centres Authority (IFSCA) on Wednesday launched the pilot run of the International Bullion Exchange, which is scheduled to go live on 1 October, the foundation day of IFSCA.
The soft launch of the bullion exchange by Injeti Srinivas, chairperson of IFSCA, is in line with the announcement made by finance minister Nirmala Sitharaman in Union Budget 2020-21.
The government had, on 11 December 2020, notified the International Financial Services Centres Authority (Bullion Exchange) Regulations, 2020, which inter alia cover the bullion exchange, clearing corporation, depository and vaults.
Government has also taken steps to notify bullion spot trading and bullion depository receipts with underlying bullion as financial products and bullion related services as financial services.
The International Bullion Exchange is deemed to be the “Gateway for Bullion Imports into India”, wherein all the bullion imports for domestic consumption shall be channelised through. 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, assurance in the quality of gold, enable greater integration with other segments of financial markets and help establish India’s position as a dominant trading hub in the world.
Pursuant to the memorandum of understanding (MoU) between National Stock Exchange of India Limited (NSE), the Multi Commodity Exchange of India Limited (MCX), India INX International Exchange (IFSC) Limited (INDIA INX), National Securities Depository Limited (NSDL), Central Depository Services (India) Limited (CDSL), the holding company India International Bullion Holding IFSC Ltd (IIBH) has been created for setting up and operationalising the International Bullion Exchange, Bullion Clearing Corporation and Bullion Depository in IFSC, GIFT City.
The IFSCA has approved the application by the holding company for setting up the International Bullion Exchange through the subsidiary of the holding company, “India International Bullion Exchange IFSC Ltd”, encompassing the Bullion Exchange and the Bullion Clearing Corporation.
CDSL-IFSC, a foreign depository has been designated as the Bullion Depository for the Bullion Exchange responsible for managing the vault.