What SEBI said regarding 'digital gold' or 'e-gold'
On Saturday, markets regulator SEBI warned investors against investing in digital or e-gold products.
SEBI stated that such instruments do not fall within its regulatory framework and carry significant risks.
This warning comes at a time when SEBI observed that some online platforms are promoting 'digital gold' or 'e-gold' as an easy alternative to investing in physical gold.
In a statement issued by SEBI, it said, "In this context, it is stated that such digital gold products are different from SEBI-regulated gold products, as they are neither notified as securities nor regulated as commodity derivatives. They operate completely outside the purview of SEBI."
Various online platforms and jewellers are promoting digital gold with minimal investment options, starting at Rs 10 or Rs 100. They are also highlighting features like anytime buy/sell and the ability to redeem for physical jewellery.
The regulator said that investors can gain exposure to gold through Sebi-regulated instruments such as Gold Exchange Traded Funds (ETFs) offered by mutual funds, exchange-traded commodity derivative contracts, and Electronic Gold Receipts tradable on stock exchanges.
Further, investments in these Sebi-regulated gold products can be made through registered intermediaries and are governed by the regulatory framework prescribed by the regulator, it added.
India’s gold exchange-traded funds saw $850 million in net inflows in October, taking the total to a record $3.05 billion -- the highest-ever for a single year, according to the World Gold Council data.