Sunday, October 24, 2021

SEBI approves frameworks for Gold and Social Stock Exchanges

Securities Exchange Board of India (SEBI) has approved the frameworks for gold exchange and Social Stock Exchange. The market regulator SEBI also approved amendments to delisting framework for equity shares at the board meeting held in Mumbai yesterday. A gold exchange is being set up to trade the yellow metal in the form of electronic gold receipts, which will help in having a transparent domestic spot price discovery mechanism.

The instrument representing gold is to be called Electronic Gold Receipt (EGR), and will be having trading, clearing and settlement features akin to other securities. In a statement, SEBI said, the Gold Exchange, encompassing the entire ecosystem of trading of EGR and physical delivery of gold, is expected to create a vibrant gold ecosystem in the country. The Gold Exchange would be a national platform for buying and selling EGRs with underlying standardized gold in India and also create a national pricing structure for gold.

Under the creation of Social Stock Exchange (SSE), the Sebi board said, it will be used for purpose of fund raising by social entrepreneurs. SSE will be a separate segment of the existing stock exchanges. Social Enterprises (SEs) eligible to participate in the SSE should be entities, Non-Profit Organizations, and for-profit social enterprises, having social intent and impact as their primary goal. The framework for the SSE has been developed on the basis of the recommendations of a working group and technical group constituted by the regulator.

The Sebi board has decided to amend rules pertaining to delisting of equity shares of a company following an open offer as part of efforts to make merger and acquisition transactions more rational and convenient. It also eased eligibility requirements relating to Superior Voting Rights shares framework.

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