The capital markets regulator Securities and Exchange Board of India Ltd (Seb)i has given Bombay Stock Exchange  (BSE) preliminary authorisation to introduce Electronic Gold Receipts (EGR) on its platform.

According to a regulatory filing on Thursday, the BSE has been urged to provide extra information in order to receive final approval for the introduction of the EGR sector.

In January, the Sebi released a framework for operationalizing the gold exchange, in which the yellow metal will be exchanged in the form of EGRs. In addition, the regulator has issued guidelines for vault managers, opening the path for the gold exchange to become live.

"Sebi has accorded its in-principle clearance for the introduction of EGR segment on BSE Limited," the exchange said in a statement. The entire transaction has been broken into three tranches under the rules: EGR creation, EGR trading on a stock exchange, and EGR conversion to real gold.

The exchanges can issue contracts with various denominations for trading or converting EGR into gold.

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