Media Release
BSE announces commencement of trading of Sovereign Gold Bonds
Sovereign Gold Bonds issued in the first tranche to be available from trading from Monday, June 13
Mumbai: June 9, 2016: In congruence with its philosophy to introduce newer, safer, investment based products for retail investors, BSE is pleased to announce the commencement of trading of sovereign gold bonds (SGBs) from Monday, June 13 on its platform. The Reserve Bank of India, vide its press release dated June 8, has notified June 13 as the date for commencement of trading of SGBs issued in the first tranche. RBI will notify similar dates for the subsequent tranches later, all such bonds will be available on BSE for trading.
These SGBs will be traded under the "G" Group of Equity Cash Segment of BSE, along with other Government Securities available for trading and settled on T+2 basis in the demat account of the investor. Sovereign Gold Bonds are issued by the RBI on behalf of the Government of India. Investors already registered with BSE can start investing directly in the SGBs through their brokers, without the need of any additional documentation.
The quantity of gold for which the investor pays is protected, since he receives the ongoing market price at the time of redemption/ premature redemption. The SGB offers a superior alternative to holding gold in physical form. The risks and costs of storage are eliminated. Investors are assured of the market value of gold at the time of maturity and periodical interest. SGB is free from issues like making charges and purity in the case of gold in jewellery form. The bonds are held in the books of the RBI or in demat form eliminating risk of loss of scrip etc. The bond holder also gets 2.75% coupon payment per year, paid semi-annually, directly into the investors' bank account registered with their demat account. The bonds will carry sovereign guarantee both on the redemption amount and the interest payable.
The Sovereign Gold Bond Scheme, 2015 was announced by the Government of India in October, 2015. The first tranche will now be available for trading. Earlier, RBI had also appointed BSE as 'Receiving Office' for collecting subscription bids from investors for primary issuance of SGBs from next tranche onwards.
BSE has also issued a FAQ regarding investment in SGBs on its website.
Some of the other salient features of investment in SGB are as follows:-
ü Available in G Group of Equity Cash Segment
ü T+2 Settlement
ü Zero STT
ü Minimum trading unit of 1 gm and in multiples of 1 gm afterwards
ü Long term capital gains tax is applicable after 3 years, the same will be zero if redeemed after full maturity.
ü No TDS applicable on interest accrued.
SGBs can be used as collateral for bank loans
About BSE
BSE Ltd. (formerly Bombay Stock Exchange Ltd.) – Established in 1875, BSE Ltd. (formerly known as Bombay Stock Exchange Ltd.), is Asia’s first & now world’s fastest Stock Exchange with the speed of 6 microseconds BSE is India’s leading exchange groups and has played a prominent role in developing the Indian capital market. BSE is a corporatized and demutualised entity, with a broad shareholder-base which includes two leading global exchanges, Deutsche Bourse and Singapore Exchange as strategic partners. BSE provides an efficient and transparent market for trading in equity, debt instruments, equity derivatives, currency derivatives, interest rate derivatives, mutual funds and stock lending and borrowing. BSE also has a dedicated platform for trading in equities of small-and-medium enterprises (SME). BSE provides a host of other services to capital market participants including risk management, clearing, settlement, market data services and education. It has a global reach with customers around the world and a nation-wide presence. BSE systems and processes are designed to safeguard market integrity, drive the growth of the Indian capital market and stimulate innovation and competition across all market segments. Indian Clearing Corporation Limited, the wholly owned subsidiary of BSE, acts as the central counterparty to all trades executed on BSE platform and provides full innovation guaranteeing the settlement of all bonafide trades executed on the BSE Platform. BSE Institute Ltd, a fully owned subsidiary of BSE, runs one of the most respected capital market educational institutes in the country. Central Depository Services Ltd. (CDSL), a subsidiary of is one of the two central depository services in India.
Media Contact
Yatin Padia
022 2272 8516
Yatin.padia@bseindia.com