New Delhi : Markets regulator Sebi allowed gold exchange-traded funds to invest up to 20% of their assets in the government’s ambitious Gold Monetisation Scheme (GMS).
The government, in November, launched gold monetisation scheme to rein in demand for physical gold and contain its import.
Through the GMS, gold in any form can be deposited with banks for a period of 1—15 years that will earn interest while redemption will be at the prevailing value at the end of the tenure.
The new scheme will replace the Gold Deposit Scheme (GDS) 1999 (GDS). However, the deposits outstanding under the GDS will be allowed to run till maturity unless these are withdrawn by the depositors prematurely.
The Securities and Exchange Board of India (Sebi) said existing investments by Gold ETFs of Mutual Funds under the GDS will be allowed to run till maturity unless these are withdrawn prematurely.
Gold ETFs are open-ended funds that trade on a stock exchange like any other share of a company and track closely the price of physical gold. Each unit of the ETF is equivalent to one gram of gold and it gives an opportunity to investors to accumulate gold over a
period of time.
