Central Govt. notifies Bullion Spot Delivery Contract and Bullion Depository Receipt with underlying Bullion as Financial Products

The Ministry of Economic Affairs on Monday notified certain financial products and also financial services.

The Financial Product includes bullion spot delivery contract and bullion depository receipt with underlying bullion.

The Financial services include trading in bullion depository receipts with underlying bullion in relation to bullion spot delivery contracts and provision of bullion financing, bullion based loans, bullion loans against collateral, bullion vaulting, clearing and settlement services in relation to bullion spot delivery contracts and bullion depository receipts.

“Bullion means precious metals including gold, silver or any other precious metal in the form of bars or unallocated gold, silver, or such other precious metals, as the Authority may consider relevant in this regard, relating to good delivery, quality, quantity, and any other aspect in relation to bullion trading , from time to time,” the notification said.

The Government notified that the “bullion spot delivery contract” shall mean a contract which provides for actual delivery of bullion and the payment of a price therefor either on the same day as the date of the contract or on the next day, the actual period for the delivery of the bullion or the remittance money therefore being excluded from the computation of the period aforesaid if the parties to the contract do not reside in the same town or locality and transfer of the bullion by the depositary from the account of a beneficial owner to the account of another beneficial owner when such bullion is dealt with by a depositary licensed by the Authority for this purpose.

The “bullion depository receipt with underlying bullion” shall mean such bullion depository receipt listed on the International Bullion Exchange (IBE) operating inside the International Financial Services Centre and is licensed by the Authority under the said Act.

“This notification shall be subject to the provisions of the International Financial Services Centres Authority Act, 2019 and the rules and regulations made thereunder,” the notification said.