Cogencis, Saturday, Aug 12
[C] SEBI mulls allowing gold ETFs to trade in gold derivatives
By Shrikant Kuwalekar and Darshan Rane
MUMBAI - The Securities and Exchange Board of India is planning to allow gold exchange-traded funds to trade in gold futures and options, which will help fund managers to take positions in the underlying asset on commodity exchanges.
"This is one of the proposals from the industry to allow gold ETFs to deal in gold-related instruments and we are contemplating it," S K Mohanty, executive director of the regulator, said.
Gold exchange-traded funds are required to buy physical gold equivalent to units bought by investors. If SEBI allows them to deal in gold futures and options, they can take equivalent positions on commodity exchanges and also take delivery from exchanges.
Of the 11 gold ETFs in India, only three-four are liquid right now.
Currently, only futures are traded in commodity markets. While options are yet to be launched, MCX has received SEBI's nod for the same and is likely to launch gold options by the first week of October.End

Edited by Harsh Vardhan

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