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Master Circular for Electronic Gold Receipts (EGRs) - SEBI - SEBI/HO/MRD/MRD-PoD-1/P/CIR/2023/82Extract ..... rovals granted fees collected, registration suspended or cancelled, any inspection or investigation or enquiry or adjudication commenced or show-cause notice issued prior to such rescission, shall be deemed to have been done or taken under the corresponding provisions of this Master Circular, 4.2. any application made to SEBI under the rescinded circulars, prior to such rescission, and pending before it shall be deemed to have been made under the corresponding provisions of this Master Circular, 4.3. the previous operation of the rescinded circulars or anything duly done or suffered thereunder, any right, privilege, obligation or liability acquired, accrued or incurred under the rescinded circulars, any penalty, incurred in respect of any violation committed against the rescinded circulars, or any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty as aforesaid, shall remain unaffected as if the rescinded circulars have never been rescinded. 5. This Master Circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in ..... x x x x x Extracts x x x x x Master Circular for Electronic Gold Receipts (EGRs) - SEBI x x x x x Extracts x x x x x ..... the aforesaid criteria and has never been out of the vaulting infrastructure, can be considered for conversion into EGR. 1.7.2.3. Vault managers shall ensure that gold to be converted into EGR meets the aforementioned criteria. 1.7.3. Standard of gold: The gold which complies either with LBMA Good Delivery Standard or with the India Good Delivery Standard, or any other standard specified by SEBI, shall be eligible under this framework. 1.7.4 . First Tranche Creation of EGR: 1.7.4.1. The Vault Manager on receipt of physical gold shall record the relevant information in the common interface and create the EGR. The EGR shall be created at the behest of the depositor (or owner of the gold) intending to convert physical gold into EGR. 1.7.4.2. The Vault Manager shall ensure that no EGR is created without the presence of corresponding physical gold in its vaults. 1.7.4.3. The EGR shall reflect in the demat account of the beneficial owner maintained with the Depository Participant. 1.7.4.4. The Depositories shall take necessary action to make EGR/s tradeable on the stock exchange/s. 1.7.4.5. The Vault Manager and the Depositories shall regularly reconcile the data of EGR s created and the ..... x x x x x Extracts x x x x x Master Circular for Electronic Gold Receipts (EGRs) - SEBI x x x x x Extracts x x x x x ..... tions). 1.12.2. Inter-operability between Vault Managers means the physical gold deposited at one location of a Vault Manager, can be withdrawn from different location of same or different Vault Manager (depending on the availability of physical gold). 1.12.3. The aforementioned provisions would allow the Depositories to facilitate withdrawal of physical gold from the preferred vault location of the buyer, to the extent possible, and possibly, save upon the cost of withdrawal of gold from the vaults. 1.13. Withdrawal Center: To increase the reach of Gold Exchange (or EGR segment), all existing branches of vault managers may be allowed as collection and/or withdrawal center , which meets the safety standards, as specified by the SEBI. The details of withdrawal centers shall be available on the websites of Depositories and vault managers. 1.14. Storage (vaulting) and Withdrawal Charges: The storage and withdrawal charges shall be levied by the vault managers and be collected by the Depositories from the beneficial owner of EGR s, for onward payment to the Vault Managers. The charges shall be disclosed by the Vault Managers upfront to the public at large. 1.15. Empanelment of assaying ..... x x x x x Extracts x x x x x Master Circular for Electronic Gold Receipts (EGRs) - SEBI x x x x x Extracts x x x x x ..... oliday list for EGR should be in line with holiday list for derivatives markets to provide efficient hedging support. 2.2. Transaction charges by the stock exchanges 2.2.1. The stock exchanges shall ensure that transaction charges on the trades executed for EGR on their trading platform, must be equitable and in the interest of investors, as specified for cash segment in SEBI circular no. SEBI/HO/MRD2/MRD2_DCAP/P/CIR/ 2021/0000000591 dated July 5, 2021 and subsequent amendment or supersession thereto through any circular or master circular issued from time to time. 2.3. Framework for Call Auction in Pre-open session 2.3.1. Duration: 2.3.1.1. The pre-open session shall be for a duration of 15 minutes i.e. from 8:45 AM to 9:00 AM, out of which 8 minutes shall be allowed for order entry, order modification and order cancellation, 4 minutes for order matching and trade confirmation and the remaining 3 minutes shall be the buffer period to facilitate the transition from pre-open session to the normal market. 2.3.1.2. The session shall close randomly during last one minute of order entry i.e. anytime between 7th and 8th minute of the order entry. Such random closure shall be system drive ..... x x x x x Extracts x x x x x Master Circular for Electronic Gold Receipts (EGRs) - SEBI x x x x x Extracts x x x x x ..... 6. Order Execution: Pursuant to the discovery of price in the pre-open session, at the time of order execution, limit orders shall be given priority over market orders. The sequence for executing orders is given below: 2.3.6.1. Eligible Limit orders shall be matched with eligible limit orders. 2.3.6.2. Residual eligible limit orders shall be matched with market orders. 2.3.6.3. Market orders to be matched with market orders. 2.3.7. Pending Orders: 2.3.7.1. In case of pending unmatched orders in pre-open session, they shall be shifted to the order book of the normal market following time priority. 2.3.7.2. Unmatched market orders will shift to the normal market order book as limit orders at a price as discovered in the pre-open session. 2.3.8. Risk Management: The current risk management system for EGR segment shall be applicable to pre-open session. 2.3.9. The following information shall be disseminated during pre-open session: 2.3.9.1. Indicative equilibrium price of EGR 2.3.9.2. Indicative cumulative buy and sell quantity of EGR 2.4. Framework for Block Deals in EGR Segment 2.4.1. Duration: Considering EGR is a new security class, and it may take time to build liquidity in this s ..... x x x x x Extracts x x x x x Master Circular for Electronic Gold Receipts (EGRs) - SEBI x x x x x Extracts x x x x x ..... de. 2.5.3.3. The Stock exchange shall disclose aforesaid information on the same day after market hours to the general public. 2.5.4. While calculating such bulk deals, stock exchanges may take suitable measures for clubbing such bulk deal positions of clients / members who may be acting in concert to circumvent these provisions. The broad guidelines for clubbing such bulk deal positions are given below. Illustrations indicating guidelines for Clubbing of Bulk Deals: - 2.5.4.1. When a person is a partner in one or more partnership firms and /or is a director in one or more companies and/or is a manager (karta) of a Hindu Undivided Family (HUF), the total executed orders of 2.5.4.1.1. the person as an individual operator, 2.5.4.1.2. the firm or firms in which he is a partner; 2.5.4.1.3. the Company or companies in which he is a director; and 2.5.4.1.4. the HUF of which he is a manager(karta) shall be taken together for calculating bulk deals. 2.5.4.2. Where two or more persons are partners in a partnership firm or firms and where two or more persons are director in a company or companies and where two or more persons are Kartas of HUFs, the total executed orders held by 2.5.4.2.1. a ..... x x x x x Extracts x x x x x Master Circular for Electronic Gold Receipts (EGRs) - SEBI x x x x x Extracts x x x x x ..... amic price bands shall be relaxed by the stock exchanges in increments of 5%. Stock exchanges shall frame suitable rules with mutual consultation for such relaxation of dynamic price bands and shall make it known to the market. 2.6.4. Stock exchanges shall take into consideration the price movement in international market while relaxing the price band. In the event of exceptional circumstances, where there is extreme price movement beyond the initial price limit in the international markets, during trading hours or after the closure of trading on domestic exchanges, the stock exchanges can relax the price band directly by the required level, by giving appropriate notice to the market. 2.7. Investor Protection Fund (IPF) Investor Service Fund (ISF) 2.7.1. In line with the prevailing norms and consultation with stakeholders, IPF and ISF being maintained by the respective stock exchanges can be utilized for the purpose of settling investor claims and investor awareness pertaining to EGR segment. 2.8. Unique Client Code (UCC) 2.8.1. For transactions in EGR segment, it shall be mandatory for the members to have Unique Client Code (UCC) for all their clients transacting on the stock exch ..... x x x x x Extracts x x x x x Master Circular for Electronic Gold Receipts (EGRs) - SEBI x x x x x Extracts x x x x x ..... tained with a particular Depository by the Vault Manager shall also be made available to the other Depository for settlement of claims. 3.1.2.5. The settlement of claims shall be done by the Depositories on a pro-rata basis. For example: If a Depository has established loss to its client equivalent to Rs 12 lakhs against a Vault Manager and the other Depository has established loss to its client equivalent to Rs. 8 lakhs against the same Vault Manager, then the FSD shall be utilized for settling claims of both the Depositories on proportional basis i.e. Rs 6 lakhs and Rs 4 lakhs respectively. 3.1.2.6. Any discrepancy noted/ claim received from a client by any of the Depositories shall be brought to the notice of other Depository as and when such claim is received or discrepancy is noted or also through a mutually agreed report format mentioning therein the details of discrepancies/claims received, on a quarterly basis, irrespective of invocation of the FSD during the said quarter. 3.1.2.7. Upon surrender of registration by the Vault Manager to SEBI, the FSD can be released after six months from the date of cancellation of registration or upon settlement of all claims, to the satisf ..... x x x x x Extracts x x x x x Master Circular for Electronic Gold Receipts (EGRs) - SEBI x x x x x Extracts x x x x x ..... of gold and have the following minimum safety and security features: 3.3.2.1 CCTV (Close Circuit Tele Vision) monitors 3.3.2.2 Indoor and Outdoor IR (Infra-Red) Cameras 3.3.2.3 Sensors: Vibration, Smoke, Movement etc. 3.3.2.4 Panic Switches and Alarm Systems 3.3.2.5 Recoding systems such as DVR (Digital Video Recording) System and have DVR located in a secured place/ area (pre-vault Area/Packing Area) under lock and key. 3.3.2.6 Interlocking doors in the premises to reach the strong rooms - Mantrap 3.3.2.7 Interlocking Panel for steel doors 3.3.2.8 Electromagnetic locks for steel doors 3.3.2.9 Control Panel with auto dialer 3.3.2.10 Video Door Phone/ Biometric Sensor 3.3.2.11 Metal detector 3.3.2.12 Steel Fabricated Strong Room (SFSR) or Additional RCC wall, roof and floor of adequate thickness 3.3.2.13 HSD (High Security Door) with Grill Gate with combination, mechanical and timer locks (Steel Door with 2 mechanical locks may be used in low risk areas) used to Control Access to Vault 3.3.2.14 Doors feature with high security locking mechanism and equipped with a spring or hydraulic automatic door closure 3.3.2.15 Adequate number of armed and unarmed security personnel at the vaul ..... x x x x x Extracts x x x x x Master Circular for Electronic Gold Receipts (EGRs) - SEBI x x x x x Extracts x x x x x ..... r fresh deposits into or withdrawal from the concerned vault. 3.5.3 In case of any discrepancy between the stock of physical gold and the electronic record of EGRs, the Depositories, in coordination with the Vault Manager, shall identify and resolve such discrepancies at the level of the recognized vault. The Depositories and the concerned vault shall strive to resolve such discrepancies before the start of the next trading day. However, in case of any delay in resolution, the Depositories shall disallow any fresh deposit of gold into or withdrawals from the concerned vault. If one Depository disallows fresh deposit into or withdrawal of gold from a particular recognized vault, the other Depository should also take similar action for that particular recognized vault. 3.5.4 The Depositories shall report to SEBI the details of discrepancies and action taken there on to resolve such discrepancies on an immediate basis. 3.5.5 In case of any technical issues involved or observed in the process of reconciliation, the Depositories and the Vault Manager shall ensure reconciliation via email or any other similar means recognized under Information Technology Act, 2000 or rules framed thereun ..... x x x x x Extracts x x x x x Master Circular for Electronic Gold Receipts (EGRs) - SEBI x x x x x Extracts x x x x x ..... preserve the gold against which it has issued EGRs. 3.8.1.2 Inspection staff must be independent of the employees/ staff deputed at the vault which is being inspected. 3.8.1.3 The Vault Manager shall ensure to maintain records of all persons entering into and exiting from the vault premises. 3.8.1.4 There must be a central system of recording the names of employees and staff who are in custody of the locks and keys of recognized vaults. 3.8.1.5 The Vault Manager must have processes to ensure that the gold against which EGRs have been issued, is never moved outside the vaulting system, except for the purpose of withdrawal of gold from the recognized vault. 3.8.2 Security Management 3.8.2.1 The Vault Manager shall ensure that the recognized vaults have adequate security personnel and shall maintain a roster of security personnel deputed at the vaults. 3.8.2.2 The Vault Manager shall clearly lay down the responsibilities of the security personnel deputed at its recognized vaults. 3.8.2.3 The Vault Manager shall clearly lay down the processes that security personnel must follow in the event of any unlawful entry, burglary, theft or damage or potential loss of the gold deposited. 3.8.2 ..... x x x x x Extracts x x x x x Master Circular for Electronic Gold Receipts (EGRs) - SEBI x x x x x Extracts x x x x x ..... the gold either due to unavoidable circumstances or otherwise, such as negligence of the Vault Manager, the Vault Manager shall be liable to indemnify for the loss/damage. 3.9.2 To deal with such scenarios, the Vault Manager shall have a procedure in place to replenish the lost/damaged gold in such a manner that: 3.9.2.1 the replenished gold is of purity and weight equivalent to the lost/damaged gold, 3.9.2.2 the replenished gold is as per LBMA or India good delivery standard, 3.9.2.3 the gold can be traced back to nominated agencies or accredited refineries, and 3.9.2.4 the gold is accompanied by proper documentation. 3.9.3 The Vault Manager shall keep the Depositories informed and the Depositories shall ensure that the requirements mentioned in para 3.9.2 are met. 3.9.4 The Depositories shall ensure that the gold is replenished by the Vault Manager within 24 hours of identification/crystallization of the lost/damaged gold failing which appropriate action shall be taken by the Depositories. 3.9.5 The Depositories shall not allow any fresh deposits and withdrawals from the said vault till the restoration of infrastructure and systems in the concerned vault. 3.9.6 In case the recogn ..... x x x x x Extracts x x x x x Master Circular for Electronic Gold Receipts (EGRs) - SEBI x x x x x Extracts x x x x x ..... findings in the inspection report of the Vault Manager/recognized vaults along with corrective measures taken by the Vault Manager/recognized vault, in response to those adverse findings. 3.12 Grievance Redressal 3.12.1 The Vault Managers and Depositories shall put in place an Investor charter including a grievance redressal mechanism to handle investor complaints. 3.12.2 The Vault Managers are required to redress all the complaints related to deposit, storage and withdrawal of gold, creation and extinguishment of EGR and quantity/purity related complaints. 3.12.3 The Depositories are required to redress complaints pertaining to EGR transactions handled by them and by the Depository Participants (DPs). 3.12.4 Different types of complaints shall be redressed in the manner as given below: 3.12.4.1 Quantity/weight related complaints 3.12.4.1.1 The complaints related to quantity or weight of gold shall be resolved by the Vault Manager within one working day of receipt of complaint failing which, the operations of the EGR segment of the concerned recognized vault shall be ceased, till the complaint is resolved. 3.12.4.2 Quality related complaints 3.12.4.2.1 The complaints pertaining to ..... x x x x x Extracts x x x x x Master Circular for Electronic Gold Receipts (EGRs) - SEBI x x x x x Extracts x x x x x ..... ther information as considered relevant by the Depositories. B. Modalities for Vault Managers and Depositories 3.14 In terms of the VM Regulations, the Vault Managers are mandated for creation and extinguishment of EGR. The modalities for deposit of gold, creation of EGR, withdrawal of gold and extinguishment of EGR are as follows: 3.15 Common Interface: 3.15.1 The Depositories shall create and manage a common interface accessible to all the stakeholders in the Gold Exchange (or EGR segment) ecosystem viz. Vault Managers, Depositories, Stock Exchanges, Clearing Corporations and clients/investors. 3.15.2 The entities shall have limited access to the interface on need to know or user rights basis. 3.15.3 The Depositories shall have a Business Continuity Plan (BCP) and Disaster Recovery (DR) policy in place as defined in SEBI circular no. SEBI/HO/MRD1/DTCS/CIR/P/2021/33 dated March 22, 2021 and subsequent amendment or supersession thereto through any circular or master circular issued from time to time so as to maintain data and transaction integrity and prevent data loss pertaining to the operation of the interface/EGR segment. Vault Managers: 3.15.4 The Depositories shall provide in ..... x x x x x Extracts x x x x x Master Circular for Electronic Gold Receipts (EGRs) - SEBI x x x x x Extracts x x x x x ..... representative will also be reflected to the concerned Vault Manager and the recognized vault in the system. 3.16.1.4 Before accepting the gold for deposit, the Vault manager shall verify the following documents and keep electronic and physical record of the same: 3.16.1.4.1 Proof of Identity (POI) and Proof of Address (POA) of the depositor 3.16.1.4.2 Proof of Identity (POI) and Proof of Address (POA) of the authorized representative including the authority letter 3.16.1.4.3 Valid mobile number and email id of the depositor and authorized representative 3.16.1.4.4 PAN number of depositor 3.16.1.4.5 Deposit request letter 3.16.1.4.6 Packing list 3.16.1.4.7 Customs clearance documents 3.16.1.4.8 Letter of indemnity from the refinery/depositor specifying that they are responsible for the quality of the gold deposited by them. 3.16.1.5 During the deposit, the Vault Manager shall necessarily weigh the gold bars and verify/match the details of each of the gold bar, against the deposit request, with the packing list. 3.16.1.6 The Vault Manager shall accept deposits coming only through accredited refineries or nominated agencies as defined in the Vault Managers regulations. 3.16.1.7 On ac ..... x x x x x Extracts x x x x x Master Circular for Electronic Gold Receipts (EGRs) - SEBI x x x x x Extracts x x x x x ..... ISIN 3.17.1.1 The Depositories shall create an International Securities Identification Number (ISIN) as per Association of National Numbering Agencies (ANNA) guidelines. 3.17.1.2 ISIN shall comprise of the following characteristics: G + Purity Where: G= Gold Purity= measure of fineness of gold as prescribed by the stock exchanges, for example 999, 995 etc. 3.17.1.3 The Depositories shall assign appropriate ISIN to the EGRs created by the Vault Managers in the system and record the EGRs. 3.17.1.4 Whenever the EGRs are created and made available for trading by the investor, the Depositories shall share the information about the availability of such EGRs for trading, with the stock exchanges. 3.17.1.5 Depositories shall verify the documents submitted by the Beneficial Owner to the Vault Manager before crediting the EGR in the demat account of the concerned Beneficial Owner. 3.18 Withdrawal of Gold and Extinguishment of EGR 3.18.1 Procedure 3.18.1.1 The Depositories shall allow the investor to place withdrawal request in the interface by selecting the choice of vault manager, recognized vault, quantity, ISIN and any other detail as specified by it. 3.18.1.2 The Depositories shall appr ..... x x x x x Extracts x x x x x Master Circular for Electronic Gold Receipts (EGRs) - SEBI x x x x x Extracts x x x x x ..... old with the registered Vault Managers, in the deposit unit , which shall be specified by the stock exchanges. 4.1.2 The trading of EGR shall take place on stock exchanges, in the trading unit , which shall be specified by the stock exchanges. The stock exchanges shall ensure that trading unit is not smaller than 10th part of the corresponding deposit unit. For example: On deposit of 100gm gold bar, 1 EGR may be created of 100 gm trading unit or 10 EGRs may be created of 10gm each trading unit. 4.1.3 The settlement unit of EGR shall be same as trading unit , which shall be specified by the stock exchanges. 4.1.4 Beneficial owner of EGR intending to obtain physical gold against the EGR/s, shall follow the procedure as stated in Chapter 1 of this Master Circular. The withdrawal unit of EGR shall be same as deposit unit , which shall be specified by the stock exchanges. 4.1.5 In addition to ISIN norms specified in Chapter 3 of this Master Circular the ISINs of EGRs shall also contain details of deposit unit and trading unit, for the purpose of easy identification by the investors. 4.1.6 The stock exchanges shall disseminate adequate information to investors, especially for EGRs with d ..... x x x x x Extracts x x x x x Master Circular for Electronic Gold Receipts (EGRs) - SEBI x x x x x Extracts x x x x x ..... above (or with similar rating nomenclature) by recognized credit rating agencies Fixed percentage based or VaR based Haircut. A higher haircut may be considered to cover the expected time frame for liquidation. To begin with the haircut shall be a minimum of 10% Not to exceed 10% of the total liquid assets of the clearing member. (Note e ) Gold ETF /Bullion (Note j ) 20% Gold ETF/Bullions as collateral for any clearing member shall not exceed 30% of the total liquid assets of the clearing member (Note f ) EGR 20% No limit Notes: a . The valuation of the liquid assets shall be done on a daily basis after applying applicable haircuts. b . The Stock Exchange shall lay down exposure limits either in rupee terms or as percentage of the total Liquid Assets that can be exposed to a single bank directly or indirectly. The total exposure towards any bank would include Bank Guarantees issued by the bank as well as debt or equity securities of the bank which have been deposited by members towards total liquid assets. Not more than 1% of the total liquid ..... x x x x x Extracts x x x x x Master Circular for Electronic Gold Receipts (EGRs) - SEBI x x x x x Extracts x x x x x ..... the clients of a member including his proprietary position. For this purpose, the positions of all the clients of a broker would be grossed. Further, there would be no netting across two different settlements. 5.3.4 There would be no netting off the positions and setoff against MTM profits across 2 rolling settlements i.e. T day and T-1 day. However, for computation of MTM profits/losses for the day, netting or setoff against MTM profits would be permitted. 5.3.5 The MTM losses so collected shall be released along with the pay-in, including early pay-in of EGR. 5.4 VaR Margin 5.4.1 Computation of VaR Margin The VaR Margin is a margin intended to cover the highest loss that can be encountered on 99.9% of the days (99.9% Value at Risk). The VaR Margin would be based on 6 , subject to minimum initial margin of 9%. 5.4.2 Collection of VaR Margin 5.4.2.1 The VaR margin shall be collected on an upfront basis by adjusting against the total liquid assets of the member at the time of trade. 5.4.2.2 The VaR margin shall be collected on the gross open position of the member. The gross open position for this purpose would mean the gross of all net positions across all the clients of a member i ..... x x x x x Extracts x x x x x Master Circular for Electronic Gold Receipts (EGRs) - SEBI x x x x x Extracts x x x x x ..... criteria and shall not discriminate between members on the basis of subjective criteria. 5.7 Margin provisions for intra-day crystallised losses 5.7.1 The intra-day crystallised losses shall be monitored and blocked by Clearing Corporations from the free collateral on a real-time basis only for those transactions which are subject to upfront margining. For this purpose, crystallised losses can be offset against crystallised profits at a client level, if any. 5.7.2 If crystallised losses and applicable margins (as defined above) exceed 90% of the free collateral available with the Clearing Corporation, then the entity shall be put into risk reduction mode as given under para 5.17. 5.7.3 Crystallised losses shall be calculated based on weighted average prices of trades executed. 5.7.4 Adjustment of intraday crystallised losses shall not be done from exposure free deposit of the clearing member. 5.8 Provision of Early Pay-in 5.8.1 Necessary systems shall be put in place to enable early pay-in of funds/ EGR. In cases where early pay-in of funds/EGR is made by the members, the outstanding position to that extent of early pay-in shall not be considered for computing the margin obligatio ..... x x x x x Extracts x x x x x Master Circular for Electronic Gold Receipts (EGRs) - SEBI x x x x x Extracts x x x x x ..... rgins for a client takes place for more than 5 days in a month, then penalty of 5% of the shortfall amount shall be levied for each day, during the month, beyond the 5th day of shortfall. 5.11.4 All instances of non-reporting shall amount to 100% short collection and the penalty as applicable shall be charged on these instances in respect of short collection. 5.11.5 The penalty shall be collected by the Clearing Corporation within five days of the last working day of the trading month and credited to its SGF. 5.11.6 The margin statement which is forwarded on a daily basis by the broker to the clients shall include a column stating the margin charged by the Stock Exchange/Clearing Corporation. 5.11.7 When penalty is being collected by a broker for short collection/ non- collection other than upfront margins from a client, then the broker shall provide the relevant supporting documents to the client. 5.11.8 If TM/ CM collects minimum 10% upfront margin in lieu of VaR and ELM from the client, then penalty for short-collection/ non-collection of margin shall not be applicable. However, it is reiterated that CC shall continue to collect the upfront margin from the TM/ CM based on VaR an ..... x x x x x Extracts x x x x x Master Circular for Electronic Gold Receipts (EGRs) - SEBI x x x x x Extracts x x x x x ..... the member shall be withdrawn and the EGR pay-out due to the member shall be withheld. 5.14.2.2 In cases where the amount of shortage exceeds 20% of the deposit but less than the deposit on six occasions within a period of three months, then also the clearing facility of the member shall be withdrawn and the EGR pay-out due to the member shall be withheld. 5.14.2.3 Upon recovery of the complete shortages, the member shall be permitted to provide clearing facility subject to his providing a deposit equivalent to his cumulative funds shortage as the 'funds shortage collateral'. Such deposit shall be kept with the Clearing Corporation for a period of ten rolling settlements and shall be released thereafter. Such deposit shall not be available for adjustment against margin liabilities and also not earn any interest. The deposit may be by way of cash, fixed deposit receipts or bank guarantee. 5.14.2.4 Clearing Corporations would have discretion to prescribe stricter criteria for these provisions. 5.15 Collateral deposited by Clients with brokers 5.15.1 Provisions related to deposit, segregation and monitoring of collaterals of clients by brokers shall be as per SEBI Circular No ..... x x x x x Extracts x x x x x Master Circular for Electronic Gold Receipts (EGRs) - SEBI x x x x x Extracts x x x x x ..... ocess and download provisional obligation files to stock brokers/ custodians by the Clearing Corporation. 2 T+1 By 2.00 PM Funds and EGR pay-in By 4.30 PM Funds and EGR pay-out Custodian confirmations shall happen before beginning of T+1. 5.20 Settlement of Funds 5.20.1 Clearing Corporation shall empanel clearing banks based on various financial and operational criteria. Clearing members shall open single settlement account with any of the clearing banks. 5.20.2 The paying member shall have clear funds in settlement account on settlement day. The Clearing Bank shall debit the paying members' account. in accordance with electronic instructions received from Clearing Corporation. The Clearing Bank shall credit the receiving members' settlement account in accordance with the pay-out instructions received electronically from the Clearing Corporation on the settlement day. 5.21 Settlement of EGR 5.21.1 Members shall be required to maintain account with depositories including a pool account. 5.21.2 Members shall provide specific delivery instructions in favour of the clearing corporation ..... x x x x x Extracts x x x x x Master Circular for Electronic Gold Receipts (EGRs) - SEBI x x x x x Extracts x x x x x ..... e same day (say Tm), on the working day immediately following the day(s) of the closure, the auction session shall be as under: 5.23.2.1 The auction of first settlement (S1) shall be conducted on the same day (Tm) and settled by next day (Tm+1). 5.23.2.2 The auction for the second settlement (S2) shall be conducted on the next day (Tm+1) along with the shortages/auction of that day. The settlement of the same shall happen by the subsequent day (Tm+2). 5.24 Close-out Procedure 5.24.1 The Close-out Procedure shall be as below: The close out Price shall be the highest price recorded in that EGR on the Stock Exchange from the date of trading and up to the date of auction/close out OR 3% above the latest available closing price at the exchange on the day on which auction offers are called for WHICHEVER IS HIGHER 5.25 Proceeds from Auction/ Close-out 5.25.1 The proceeds from Auction/ Close-out shall be used to settle the claim of the aggrieved party. Any amount remaining thereof shall be credited to the Core Settlement Guarantee Fund instead of crediting it to the defaulting party s account. 5.26 Settlement Guarantee Fund, Default Waterfall and Stress Testing 5.26.1 Clearing Corporations ..... x x x x x Extracts x x x x x Master Circular for Electronic Gold Receipts (EGRs) - SEBI x x x x x Extracts x x x x x ..... Resolved Pending 1 2 3 4 5 6 1 April 2 May 3 Grand Total Annexure C - List of Circulars rescinded S.no. Date Title 1 Jan 10, 2022 Framework for operationalizing the Gold Exchange in India 2 Feb 14, 2022 Trading features pertaining to the Electronic Gold Receipts (EGR) segment 3 Feb 14, 2022 Standard Operating Guidelines for the Vault Managers and Depositories 4 March 28, 2022 Product Specifications pertaining to EGR Segment in India 5 April 11, 2022 Comprehensive Risk Management Framework for Electronic Gold Receipts ..... x x x x x Extracts x x x x x Master Circular for Electronic Gold Receipts (EGRs) - SEBI x x x x x Extracts x x x x x
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