NSE to accept gold bars produced by Indian refiners for settlement of gold futures contract

The introduction of NRS for BIS – Standard Gold- will facilitate greater participation from the domestic market players in the exchange traded deliverable bullion commodity derivatives by widening the scope of acceptable bullion commodity for delivery on the platform, the National Stock Exchange (NSE) said.

Leading stock exchange NSE on Friday said it will accept gold bars produced by the domestic refiners for settlement of the gold futures contracts traded on its platform

For this, the exchange launched NSE Refiner Standards (NRS) for BIS - Standard Gold- which will be effective from Friday, July 10

"The NSE Refiner Standards for BIS – Standard Gold would enable the acceptance of gold bars produced by the domestic refiners in India, for settlement of the gold futures contracts traded on the NSE platform," the exchange said in a statement. Until Thursday, NSE accepted serially numbered gold bars produced by London Bullion Market Association (LBMA) approved refiners for settlement of the gold contracts traded on the commodity derivatives segment of the exchange. 

The introduction of NRS for BIS – Standard Gold- will facilitate greater participation from the domestic market players in the exchange traded deliverable bullion commodity derivatives by widening the scope of acceptable bullion commodity for delivery on the platform, the National Stock Exchange (NSE) said. This in turn will be helpful in deepening the market and facilitate the overall development of physical settlement framework in Indian commodity derivatives market, it added. "With the launch of NRS for BIS – Standard Gold, NSE aims to offer a fair chance to the Indian refiners, adhering to the BIS notified standards, to be a part of the exchange settlement framework.

This initiative demonstrates NSE's vision and commitment towards inclusive growth of all market participants," said Ravi Varanasi, Chief Business Development Officer at NSE. The move is aimed at enhancing the effectiveness of the physical settlement framework for the commodity derivatives contracts in the country by including the Indian refiners in the exchange settlement framework. It will also help widen the array of acceptable gold which can be provided by the members for the physical settlement of gold contracts traded on the commodity derivatives segment of NSE.

By way of these standards, the exchange has laid down detailed guidelines for criteria for empanelment, both quantitative and qualitative; compliance requirements; technical evaluation; process and sourcing audits including a fallback mechanism. NSE had launched its commodities derivatives platform during 2018-19.

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