Sebi mulls expanding vault manager framework to cover bullion ETFs, derivatives

New Delhi: Markets regulator Sebi proposed expanding the regulatory framework for vault managers to cover physical bullion underlying a wider range of products, including gold and silver ETFs and bullion derivatives. The proposal is part of Sebi’s plan to review and expand the Sebi (Vault Managers) Regulations, 2021, and establish a harmonised vaulting framework for all bullion underlying Sebi-regulated products.

Under the proposed framework, vault managers would cover physical gold, silver and other precious metals underlying Electronic Gold Receipts (EGRs), bullion ETFs, bullion derivatives and any other bullion-related instruments specified by the regulator. Currently, the vault manager framework primarily governs the storage and safekeeping of physical gold underlying EGRs traded on recognised stock exchanges.

Vault managers are responsible for receiving, storing and safeguarding gold, as well as facilitating the creation and extinguishment of EGRs. The 2021 regulations prescribe requirements relating to registration, governance, net worth, risk management, internal controls, insurance, record maintenance, reconciliation, audit, grievance redressal and business continuity.