Stories
SEBI Expands Vault Manager Rules for Gold, Silver ETFs and Bullion Derivatives
- •SEBI has expanded its regulatory framework for vault managers to include bullion underlying gold and silver ETFs and bullion derivatives, aiming to harmonize standards in the growing bullion market.
- •The amendments to the SEBI (Vault Managers) Regulations, 2021, will replace EGR-specific provisions with a product-neutral framework covering all specified bullion-related instruments.
- •The net worth requirement for vault managers will increase from Rs 50 crore to Rs 75 crore, and "Gold Standards" terminology will be replaced with "Bullion Delivery Standards."
- •Vault managers must strengthen security policies against risks like theft and cyberattacks, and expand business-wise segregation to cover all SEBI-specified bullion-related instruments.
- •Additional requirements include instrument-wise and entity-wise segregation of bullion, and the appointment of a compliance officer to ensure a harmonized and scalable framework for bullion custody.
Key Questions Answered
SEBI expanded its regulatory framework for vault managers to cover bullion underlying gold and silver ETFs and bullion derivatives. The amendments replace the previous electronic gold receipt (EGR)-specific provisions with a product-neutral framework and introduce updated definitions for bullion and bullion-related instruments.
SEBI increased the minimum net worth requirement for vault managers from Rs 50 crore to Rs 75 crore.
Vault managers must strengthen security policies to address risks such as theft, burglary, fire, fraud, terrorism, and cyberattacks. They are also required to implement instrument-wise and entity-wise segregation of stored bullion, establish a compliance officer role, and adhere to updated delivery and reconciliation standards.
