Page 31 - Bullion World Volume 03 Issue 6 June 2023

Bullion World | Volume 3 | Issue 6 | June 2023

Member for clearing and settlement
IFSCA is working with the concerned regulatory / of their trades on IIBX.
government authorities to explore the ways to increase the
participation of Indian banks’ IBUs, on IIBX as they may play IIBX as a platform for hedging
a useful role by establishing the linkages with the domestic of bullion price risk by resident
gold markets through resident entities (including QJs) entities
seeking to import bullion or / and hedge their gold price risks The December 2022 RBI Circular
through IIBX. permits resident entities in India to

hedge their gold price risk on the
exchanges in GIFT-IFSC. Once IIBX
stored in IFSCA-designated vault quantity and identity parameters launches derivatives trading, QJs
managers. stored with the IFSCA-designated and other entities will be able to
vault managers. This additional hedge their USD gold price risks on
IIBX was formally launched by the channel is expected to result in the same platform. IFSCA has issued
Hon’ble Prime Minister of India disintermediation benefits when regulatory guidelines for enhancing
on July 29, 2022, at GIFT IFSC, compared to import consignments IIBX’s capital in a gradual manner.
Gandhinagar, Gujarat. through nominated banks/agencies. With a stronger capital base and
risk management systems, IIBX will
IIBX as an alternative channel for The RBI Circular issued on May 25, attract increased participation of
import of bullion into India 2022, to Authorised Dealer Banks the resident entities (in addition to
The Niti Aayog Report recommended in India (DTA) facilitates foreign QJs) as well as international market
the international bullion exchange in exchange remittance by QJs for participants.
GIFT-IFSC to facilitate gold imports gold import through IIBX. QJs are
in India and the vaults to work with permitted to participate as clients of IIBX to facilitate imports under
the proposed Bullion Exchange in bullion trading members (brokers) India-UAE CEPA through
DTA (domestic tariff area) India for of IIBX or directly as limited-purpose ICEGATE System
distribution of bullion in the local trading members (QJ-LPTM). The India-United Arab Emirates
markets. However, QJ-LPTM entities must (UAE) Comprehensive Economic
utilise the services of a Clearing Partnership Agreement (CEPA)
With the trade liberalisation and Member for trade clearing and signed in February 2022 promotes
implementation of reforms since settlement. bilateral trade in bullion and gems
the early and mid-1990s, gold and jewellery sectors. The Customs
imports were permitted through The IFSCA has also issued notifications and the DGFT Public
the nominated agencies as notified guidelines for eligible suppliers, Notices allow IFSCA-notified QJs
by DGFT (such as MMTC, HHEC, including banks, trading houses, and to import gold (under Tariff head-
STC, etc) and nominated banks as refiners to participate as Qualified 7108) directly through IIBX, under
permitted by the RBI. Suppliers (QS) in the IIBX. These the India-UAE CEPA, in addition
guidelines aimed at fostering a nominated agencies / nominated
With the establishment of the IIBX diverse and competitive marketplace banks and other eligible entities.
at GIFT-IFSC, the DGFT in January for bullion trading, laying out the As required under the procedure,
2022 allowed IFSCA-notified eligibility norms for to ensure efficient the imports under CEPA are to be
Qualified Jewellers (QJs) in India and transparent transactions. processed through ICEGATE system.
to import gold directly through the To enable imports under the India-
IIBX. Thus, resident entities meeting While the QS-Client can engage in UAE CEPA by QJs holding Tariff
the eligibility criteria (including trading (buy and sell) through bullion Rate Quota (TRQ) issued by DGFT,
a minimum net worth of INR 25 trading members (brokers) of IIBX, it became necessary for the GIFT-
crore) could apply for QJ status QS-LPTM entities can directly supply SEZ port to migrate to the ICEGATE
and purchase BDRs on IIBX and (sell only) gold on the IIBX without system.
rematerialize them to physical a broker. QS-LPTM entities must
bullion bars of corresponding quality, also utilise the services of a Clearing

31