India nears approval of gold ETFs

Gold ETF Guidelines to be Announced Shortly

By Press Trust of India
via The Hindu, Madras
Saturday, September 16, 2006

http://www.hindu.com/thehindu/holnus/006200609160314.htm

MUMBAI -- Market regulator SEBI is busy giving finishing touches to the long-awaited detailed guidelines on the gold exchange-traded fund (ETF), which will allow retail investors to buy and sell gold like units of mutual funds.

Officials of the Securities and Exchange Board of India and the Association of Mutual Funds in India (AMFI) are giving the finishing touches to the detailed guidelines on the gold ETF, AMFI's Chairman A.P. Kurian said while speaking Friday at a seminar organised here by Dun & Bradstreet.

Forward Markets Commission (FMC) Chairman S. Sundareshan, who also attended the function, declined to comment when asked whether gold ETFs were to be listed on commodity exchange or stock exchanges.

However, AMFI Chairman told PTI that the gold ETF would first be traded on the stock exchanges.

Who should be the custodian for the gold ETF and who will bear the cost were among the issues that were being worked out while finalising guidelines for the gold ETF, Kurian added.

Cost is to be borne by the investors and has to be economical, he commented.

Benchmark Mutual Fund and UTI Mutual Fund, which have already filed their offer document for the gold ETF, are likely to get the nod of regulators nod soon after the guidelines are in place.

India will be the fourth country to have an ETF in gold, after South Africa, the United States, and Australia, he said.

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