India’s largest stock exchange, NSE has announced the commencement of live trading in Electronic Gold Receipts segment, coming into effect from today, May 18. Currently the vault and collection centres for EGRs are operational in the cities of Ahmedabad and Mumbai.
NSE to open 120 collection centres
The stock exchange citing successful response of the EGR product has said that it is activating four additional vaulting and collection centres being brought into service at Delhi, Kolkata, Chennai and Bangalore with effect from May 18.
Also, NSE, in its press release, said the exchange is planning to open more centres in phases, expanding the network to 120 centres across the country in due time.
Two days prior to its commencement, the stock exchange had conducted a mock trading exercise on May 16, which it said was completed without any errors or systematic flaws.
What is an Electronic Gold Receipt?
An EGR represents digital ownership of gold, backed by actual physical gold, which can be redeemed anytime. SEBI had first announced NSE’s EGR platform in 2022. When an investor purchases EGRs, it is directly reflected in their demat accounts, much like shares and bonds.
This digital gold can be converted into physical gold at the time of redemption. Retail investors, jewellers, bullion dealers, and refineries all can purchase these EGRs. They are easily tradable on exchanges and provide a more convenient option compared to physical gold, offering liquidity and ensuring the quality of the gold held.
EGRs are traded on NSE’s dedicated EGR segment from Monday to Friday, between 9:00 am and 11:30 pm (IST). The extended trading enables Indian investors to take cues from international prices.Settlement on NSE’s EGR segment occurs on a T+1 basis, meaning transactions are finalised the next working day.