The International Financial Services Centres Authority (Bullion Exchange) Regulations, 2020, which recognize and regulate the Bullion Exchange, Bullion Clearing Corporation, Bullion Depository, and Bullion Vaults, were officially notified and published in the Gazette of India on December 11, 2020.
In this context, “Bullion” refers to precious metals, including high-purity gold and silver often held in the form of bars, ingots, or coins.
During the Union Budget for FY 2020-21, Hon’ble Union Finance Minister Smt. Nirmala Sitharaman had announced the establishment of an International Bullion Exchange in GIFT-IFSC with the vision of positioning India as a global influencer in bullion prices. This initiative was intended to generate employment in India and enhance the price discovery process for gold. Subsequently, on August 30, 2020, the Central Government notified “bullion spot delivery contracts” and “bullion depository receipts” (with underlying bullion) as ‘Financial Products’ and related services as ‘Financial Services’ under the International Financial Services Centres Authority Act, 2019.
On July 29, 2022, Hon’ble Prime Minister Shri Narendra Modi inaugurated the India International Bullion Exchange (“IIBX”), India’s first International Bullion Exchange in GIFT-IFSC. This marked the 3rd exchange of its kind globally, with technology-driven solutions that facilitated the transition of the Indian bullion market towards a more organized structure. It also granted Qualified Jewellers direct access to import gold through the exchange mechanism.
The International Financial Services Centres Authority has also established a “Precious Metals Advisory Committee” to foster the development of the precious metals ecosystem at IFSC and gain insights into prevailing regulatory practices in the global precious metal landscape. This committee is tasked with recommending short, medium, and long-term visions and roadmaps for International Financial Services Centres Authority and providing guidance on regulatory best practices in the precious metal sector across key international financial jurisdictions.
In light of the policy challenges faced by the bullion industry within IFSC, the International Financial Services Centres Authority has cordially invited suggestions for the review of the International Financial Services Centre Authority (Bullion Exchange) Regulations, 2020, from both the public and regulated entities. The deadline for submitting these suggestions is November 30, 2023.
A copy of the International Financial Services Centres Authority press release seeking suggestions is enclosed below.
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