India’s markets regulator, Sebi, is set to extend its vaulting regulations beyond gold receipts to encompass physical bullion used in a wider range of products, including ETFs and derivatives, in a move aimed at standardising compliance and safeguarding investor interests.
India’s markets regulator is preparing to widen its vaulting rules beyond gold receipts to cover physical bullion used in a broader set of Sebi-regulated products, including exchange-traded funds and derivatives. According to Business Standard, the move would bring gold and silver held for investors under a more uniform supervisory framework, reflecting the growing scale of physically backed precious-metal products.
The Securities and Exchange Board of India said the existing Vault Managers Regulations, 2021, were built around gold backing electronic gold receipts, or EGRs, and now need to be adapted for a wider market. The regulator wants a common set of standards for storage, audit, reconciliation, inspection, reporting and risk controls, while still allowing product-specific operating rules where needed.
Sebi’s draft changes would replace EGR-specific language with product-neutral provisions and would also update definitions tied to bullion standards and vaulting services. The plan is to accompany the regulatory changes with a consolidated circular covering the framework and operating details for EGRs and other Sebi-specified bullion instruments, including how bullion is deposited, stored, transferred, withdrawn and insured.
The regulator said the review is being driven by the expansion of physically backed precious-metals products and the larger volumes of gold and silver now held in custody for investors. It argued that a common framework would help ensure consistent standards for vault infrastructure, governance, purity checks, cyber security, business continuity and grievance handling, alongside stronger operational resilience and investor protection.
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