To

All Market Participants of IIBX (Members, Clients, Qualified Jewellers & Qualified Suppliers), IFSC Authorised Vaults and India International Depository IFSC Limited (IIDI) .

Subject – Introduction of Trading in Gold Futures Contracts & Product Specifications thereof

Reserve Bank of India (RBI) vide Circular No. 20 dated December 12, 2022 (updated as on April 15, 2024) issued Master Directions – Foreign Exchange Management (Hedging of Commodity Price Risk and Freight Risk in Overseas Markets) Directions, 2022. Vide this circular, RBI has allowed  Eligible entities having exposure to price risk of Gold to hedge such exposure in the International Financial Services Centre (IFSC), subject to the stipulations set out in the referred Master Directions. A copy of the referred RBI Circular is enclosed as Annexure A .

In view of the above and based on IFSCA approval, India International Bullion Exchange IFSC Ltd. (IIBX) is pleased to introduce the Trading in Gold Futures Contracts with effect from Friday the June 21, 2024. The Product specifications for Gold Futures Contracts are enclosed as Annexure B to this circular. The Market Participants trading in Gold Futures Contracts at IIBX shall have the choice for either Cash Settlement or Settlement by Physical Delivery subject to conditions, as stipulated.

Members intending to participate in Futures Contracts need to open separate Bank Accounts for Collateral Management, Daily & Final Settlement and for segregation of Client Funds for Futures Contracts viz. Margin Account, Settlement Account and Client Account respectively with any one of the Clearing Banks empanelled with IIBX.

The Market Participants are requested to note the following restrictions with respect to Physical Delivery of Gold under Gold Futures contracts:

Physical Delivery by Market Participants holding Short Positions:

1. Delivery of Physical Gold Bars in the Vaults and creation of BDRs thereof is only permitted for Qualified Suppliers. The BDRs thus created and backed by Physical Gold Bars in the Vaults registered with IFSCA and empaneled by India International Depository IFSC Ltd. (IIDI) can be used for Delivery of contract by the Members, Non-Resident Clients & Qualified Suppliers (QS).

2. Resident Entities cannot settle their Short positions by giving physical delivery.

Physical Delivery by Market Participants holding Long Positions:

1. Funds Pay-in from entities in Domestic Tariff Area (DTA) for Physical delivery of Gold Bars can only be accepted from the Qualified Jewelers (QJs) and Special Category Client Banks .

2. Settlement of long positions by taking physical delivery (by eligible resident entities) must result in import into DTA.

3. Resident Entities (Entities in DTA of India) that are not notified Qualified Jewellers or Special Category Client Banks, are not allowed to settle their long positions by taking Physical delivery of Gold.

4. The funds pay-in for delivery can also be accepted from Members, Non-Residents Clients and Qualified Suppliers for taking delivery of contract.

The Trading & Settlement in Gold Futures Contracts shall be subject to compliance with the IFSCA (Bullion Exchange) Regulations, 2020, the consolidated Operating guidelines on Bullion Exchange issued by IFSCA on August 25, 2021 and all other relevant laws applicable to it including the rules, regulations, guidelines, circulars, instructions and conditions as may be prescribed by IFSCA from time to time.

Further, the Trading & Settlement in Gold Futures Contracts shall also be subject to the Rules, Regulations, Byelaws and any circulars issued by IIBX from time to time.

Following are the important URLs for Gold Futures Trading:

Web portals for Gold Futures Trading*:

*The Login credentials shall be provided by the IIBX team.

Tutorial Videos:

Backoffice File Formats:

For more information about the Gold Futures Trading, please refer to the IIBX website URL: https://derivative.iibx.co.in .

For further clarifications, the Market Participants may contact as per below details:

For and on behalf of

India International Bullion Exchange IFSC Ltd.

Surendra Rashinkar

Chief Regulatory Officer

Contact No. +91 79 69 697 104

Email Id: regulatory@iibx.co.in

Encl.: As above.