national The Stock Exchange (NSE) on Friday started live trading in Electronic Gold Receipts (EGRs). It did a business of Rs 23.34 crore on the first day. According to a joint statement of NSE and Augmont Enterprises, a total of 1,60,357 EGR units, equivalent to about 6 kg of gold, were traded till 04:25 pm.
0.1 gram of physical gold is equal to 1 EGR
According to the statement, the pricing in this segment was also determined in a systematic manner. Prices traded in a tight range of Rs 1,450.50 to Rs 1,460, while the difference between buying and selling prices remained at 50 paise to Re 1. Each EGR is equivalent to 100 mg i.e. 0.1 gram of physical gold. The gold in return is kept in a SEBI regulated vault.
You can buy and sell EGRs through Demat account
Investors can buy and sell these EGRs through their demat account. This segment follows the T+1 settlement cycle, under which units bought or sold on a particular day are settled in the next trading session.
This business is a result of the partnership between NSE and Augmont to develop the EGR ecosystem. Through this, investors can hold and transact receipts, which actually represent ownership of physical gold, through their demat account.
What are Electronic Gold Receipts (EGRs)?
EGRs are ‘exchange-traded securities’ backed by physical gold held in a secure vault. With their help, investors can buy and sell gold through the stock exchange without keeping the physical gold with them. These receipts are held in digital form like shares and can be bought or sold through a stock broker. NSE offers EGR contracts in different quantities, including 100 mg, 1 gram, 10 grams, 100 grams and 1 kilogram.
Investors can keep the EGRs in their demat account, or can also take delivery of physical gold by following the prescribed procedure. When withdrawing physical gold, certain charges like storage, testing and transportation may be imposed.
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