SEBI Digital Gold Warning
Overview
The Securities and Exchange Board of India (SEBI) has issued a warning to the public about investing in so-called ‘Digital Gold’ or ‘E-Gold’ products. These products are being marketed by various online platforms.
SEBI's Clarification
- SEBI clarified that these offerings are not regulated by them and fall outside its purview.
- Investments in regulated gold products can be made through:
- Exchange traded commodity derivative contracts.
- Gold Exchange Traded Funds (ETFs) offered by Mutual Funds.
- Electronic Gold Receipts (EGRs) tradeable on stock exchanges.
- These investments must be made via SEBI registered intermediaries and are governed by SEBI’s regulatory framework.
Risks of Digital Gold
- Digital gold products marketed online are not notified as securities or regulated as commodity derivatives.
- SEBI warns of the significant risks involved, including counterparty and operational risks.
- Investors are cautioned that protection mechanisms available under securities market regulations do not apply to digital gold investments.
