Gold ETF

65. (1) In case of a Gold ETF, at least ninety per cent. (90%) of the AUM shall be invested in Gold or bullion instruments such as Bullion Depository Receipts with underlying Gold, and Exchange Traded Commodity Derivatives (ETCD) with gold as the underlying: Provided that the exposure to ETCDs having gold as the underlying shall not exceed ten per cent. (10%) of AUM of the scheme: Provided further that the limit of ten per cent. (10%) shall not be applicable to Gold ETFs where the intention is to take delivery of the physical Gold and not to rollover its position to next contract cycle. (2) Gold ETFs shall be benchmarked against the price of spot Gold at the recognised stock exchange or any other benchmark price as may be specified by the Authority and FMEs shall endeavor to have tracking error as low as possible. (3) The FMEs shall ensure that for investment in physical Gold, the Gold should be supplied by a refiner certified for complying with OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. (4) Physical Gold shall be stored with a vault registered with the Authority. (5) Physical verification of gold underlying the Gold ETF units shall be carried out by an independent agency capable of undertaking such activities and report to the FME and fiduciaries on half yearly basis and not later than two months from the end of the half year.