The enabling framework will help generate interest in trading and hedging activities, and serve as a precursor to International Bullion Exchange(IBE), IFSCA said in a statement.
The first and only International Financial Services Centre (IFSC) in the country has been set up at the Gujarat International Finance Tec-City (GIFT) in Gandhinagar.
IFSCA in a circular said, banks in IFSCs can operate Unallocated Accounts for the purpose of trading, hedging and swapping with physical Gold/Silver.
“To mitigate the risks of the prospective clients of Banking Units (BUs) who may be looking to buy/sell or take positions in gold/silver or for the purpose of trading or to hedge their exposures in bullion,” it said.
To aid in financialization of gold as an asset class, it said, the framework would encourage trading, hedging and swapping with physical Gold/Silver.
All BUs are permitted to open unallocated accounts in gold (XAU) and silver (XAG) subject to the risk management framework and disclosures, it added.
The IFSCA was established on April 27, 2020, with its head office in Gandhinagar to regulate and develop financial activities in IFSCs in the country.
In December 2019, Parliament passed a bill to set up a unified authority for regulating all financial activities at IFSCs in the country.
