MUMBAI: The board of the market regulator, the Securities and Exchange Board of India (SEBI) today cleared a proposal for setting up a gold exchange wherein the yellow metal will be traded in the form of Electronic Gold Receipts (EGRs), and the bourse will help in having a transparent domestic spot price discovery mechanism. 

The EGRs, the instruments that represent gold, would be notified as securities, SEBI Chairman Ajay Tyagi said at a press conference after the board meeting today. 

"EGRs will have the trading, clearing and settlement features akin to any other securities," he said. 

Any recognised stock exchange, existing as well as a new one, can launch trading in EGRs in a separate segment. The denomination for the trading of EGR and conversion of EGR into gold can be decided by the stock exchanges with the approval of the SEBI. 

The gold exchange, encompassing the entire ecosystem of trading of EGRs and physical delivery of gold, was expected to create a vibrant gold ecosystem in India, the SEBI said. 

According to the market regulator, the exchange would be a national platform for buying and selling EGRs with underlying standardised gold in India and would also create a national pricing structure for gold. 

Tyagi said today that a proposal had been cleared for the creation of social stock exchanges for fundraising by social enterprises. He further added that he could not specify the timeline for such an exchange and would coordinate with the government to take it ahead. 

When asked about the Zee-Sony merger case, the regulator said that it would look into the matter and if it found any violation of regulations it would take appropriate actions.