MUMBAI/LONDON: India plans to finalise trading specifications for the country’s new spot gold exchange in November amid a push to improve transparency in the world’s second-biggest bullion market, people familiar with the matter said.
A panel of finance ministry and trade ministry officials, as well as industry groups including refiners, jewellery associations and export and import firms, plan to have a final meeting in November in New Delhi, said the people, who asked not to be identified because the information is private. They’ll decide on things such as contract sizes and delivery rules, the people said.
DS Malik, a spokesman for the finance ministry, didn’t answer calls seeking comment.
The new exchange is one of the measures that Prime Minister Narendra Modi’s government plans to use to help overhaul a fragmented jewellery industry, boost transparency and streamline bullion trading. In May, the World Gold Council said that it’s working with the government to create a local spot-gold exchange that may start up as soon as next year. Spot gold hasn’t traded on an Indian bourse since authorities halted trading on the National Spot Exchange Ltd. in 2013.
A draft of guidelines for the bourse has been sent to about 30 industry stakeholders and the panel will have some meetings before rules are finalised in November, one person said. Discussions will also centre on accrediting several refiners for good delivery along the lines of standards set by the London Bullion Market Association, as well as a code of conduct to ensure responsible trading on the exchange, the person said.
In India, gold currently trades on exchanges only as futures. The country’s jewellers buy the metal from importing agencies nominated by the Reserve Bank of India, including banks, some trading houses and large jewellers, or from dealers who purchase it from those banks.