Launch of NSE Refiner Standards for BIS – Standard Gold

National Stock Exchange of India Ltd (NSE), the leading stock exchange in India, today announced the launch of NSE Refiner Standards (NRS) for BIS – Standard Gold.

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 NSE Refiner Standards for BIS – Standard Gold shall be effective from Friday, July 10, 2020.

Until yesterday, 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 NSE.

However, taking into account the fact that there are several Indian refiners having capabilities of producing the gold bars as per Bureau of Indian standard (BIS) notified standards – IS 17278: 2019, it has been decided by the exchange to accept gold bars produced by specified Indian refiners adhering to the above BIS notified standards.

This initiative is in line with the government's efforts to transition to Atma Nirbhar Bharat, there by encouraging ‘Make in India’ program.

The introduction of NRS for BIS – Standard Gold by NSE shall 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 NSE platform.

This in turn shall be helpful in deepening the market and facilitate the overall development of physical settlement framework in Indian commodity derivatives market.

Mr. Ravi Varanasi, Chief Business Development Officer, NSE said, “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.”

NSE Refiner Standards (NRS) for BIS – Standard Gold is aimed at enhancing the effectiveness of the physical settlement framework for the commodity derivatives contracts in India by including the Indian refiners in the exchange settlement framework.

It shall also facilitate in widening 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.

Till this point of time serially numbered gold bars produced by only the London Bullion Market Association (LBMA) approved refiners have been accepted for settlement of the gold contracts traded on the commodity derivatives segment of NSE.

However, with this initiative, NSE acknowledges the fact that there are several Indian refiners having capabilities of producing the gold bars as per Bureau of Indian standard (BIS) notified standards – IS 17278: 2019.

By way of these standards, NSE 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 launched its commodities derivatives platform during 2018-19 thereby giving the trading community the complete NSE advantage to trade and clear multiple asset classes at one single location leading to capital efficiency.