The Bombay Stock Exchange (BSE) is ready with its technology to introduce electronic gold receipts (EGRs) on its platform, which will help in creating a uniform price structure of the yellow metal across the country, Sameer Patil, chief Business officer, BSE, said on Sunday.

The exchange will take the required internal approvals and apply to market regulator SEBI for the launch of the new class of security on its platform.

This comes after the SEBI board on Tuesday cleared a proposal for gold exchange, wherein the yellow metal will be traded in the form of EGRs and will help in having a transparent domestic spot price discovery mechanism.

Currently, India allows trading only in gold derivatives and Gold ETFs, unlike several other countries which have spot exchanges for physical trade in gold.

The instruments representing gold will be called Electronic Gold Receipts (EGRs) and they will be notified as securities.

EGRs will have trading, clearing and settlement features akin to other securities that are currently available in India.

BSE, which is well known for its technological prowess, has been the main proponent of creating a transparent and efficient spot market for gold as it is very important commodity for Indian consumers, Patil said. He added that the exchange had been preparing the technology for a very long and had been waiting for the in-principle approval for the same to take it further.

The exchange had made several presentations to government and regulators on how the process will work, and how banks, wholesalers, retailers, importers, exporters, etc, will participate in this ecosystem.

According to Patil, like shares, these EGRs will be held in demat form and can be converted into physical gold when needed.

To enable trading in physical gold, EGRs (backed by physical gold) will be traded and settled on stock exchanges.