Overview
- In a November 8 advisory, SEBI said digital or e-gold products offered by some online platforms and jewellers are neither securities nor commodity derivatives and operate outside its oversight.
- The watchdog cautioned that such products can expose investors to counterparty and operational risks due to the absence of statutory oversight and clear custody frameworks.
- SEBI clarified that investor protection mechanisms available in the securities market do not apply to these unregulated offerings.
- Investors were directed to regulated avenues such as gold exchange-traded funds, exchange-traded commodity derivative contracts, and Electronic Gold Receipts tradable on stock exchanges through registered intermediaries.
- Despite caution on unregulated products, demand for regulated exposure remains strong, with India’s gold ETFs seeing USD 850 million in net inflows in October, according to World Gold Council data.