Precious metals code proposed to regulate gold business

Gold delivery rules and spot exchange also on agenda, three committee likely to be set up

For better organisation and discipline in the bullion business, various stakeholders, including the representatives of gold value chain and the World Gold Council, have decided to implement the precious metals code for the gold business. This code will comprise the Dos and Don’t’s for bullion traders and its violation will attract actions by the authority implementing the code, most likely the apex bullion trade organisation Indian Bullion Jewellers Association (IBJA).

At a closed-door meeting in Mumbai’s Sahara Star hotel on Thursday, the issue was discussed among IBJA, WGS, India Gold Centre working under the Indian Institute of Management-Ahmedabad (IIM-A), commodity and stock exchanges, and the Gold Refiners Association Of Gold Refineries & Mint.

The meeting, said to have been called at the behest of IBJA, decided to form three different committees. Apart from the precious metals code, another committee will deliberate on the Indian gold delivery rules for gold and silver bars.

From June, only BIS-certifies gold refineries will be allowed to import gold dore. For this, BIS has already specified its standards. And, the government is separately working on the Indian gold standards. However, to this day no India dore gold refinery except MMTC-PAMPS has an LBMA recognition. Only LBMA standard gold is deliverable on MCX. IBJA has proposed that the Indian good delivery standards for gold and the committee should finalise the proposals for it. If this happens, even gold refined by a BIS-certified gold refinery could be delivered on commodity exchanges.

According to a source who was privy to discussions at Thursday’s meeting, setting up a spot gold exchange is an important issue that was deliberated upon. A separate committee will look into real issues regarding the gold exchange and propose a road map and norms to self-regulate it to help the government give approval to the spot exchange.