IFSCA does pilot run of International Bullion Exchange

The pilot run of the International Bullion Exchange (IBE) was conducted by the International Financial Services Centres Authority (IFSCA) at Gujarat International Fin-Tec (GIFT) City, Ahmedabad, on August 18.

The IBE will go live from October 1 this year.

IFSCA chairman Injeti Srinivas, who launched the run, said the IBE shall be the “gateway for bullion imports into India and all bullion imports for domestic consumption shall be channelised through the exchange”.

The IFSCA (Bullion Exchange) Regulations, 2020, were notified on December 11, 2020, which, inter alia, covers the Bullion Exchange, Clearing Corporation, Depositories and Vaults.

The notification followed the announcement by Union Minister for Finance and Corporate Affairs Nirmala Sitharaman in the Union Budget 2020-21.

The government has also taken steps to notify bullion spot trading and bullion depository receipts, with the underlying bullion as financial product and bullion-related services as financial services.

The exchange ecosystem is expected to bring all market participants to a common transparent platform for bullion trading and efficient price discovery, assurance in the quality of gold, greater integration with the other segments of financial markets and to help establish India’s position as a dominant trading hub in the world.

A holding company, India International Bullion Holding IFSC Ltd (IIBH), has been set up to operationalise the International Bullion Exchange, Bullion Clearing Corporation and Bullion Depository in IFSC, GIFT City,

IIBH was set up pursuant to a memorandum of understanding between the National Stock Exchange of India (NSE), Multi-Commodity Exchange of India (MCX), India INX International Exchange (INDIA INX), National Securities Depository Ltd (NSDL), Central Depository Services (India) Ltd (CDSL),

CDSL-IFSC, a foreign depository, has been designated as the bullion depository for the bullion exchange, responsible for managing the vault manager.