MCX to accept bullion refined in India

With an objective to enable delivery of gold and silver refined in India, MCX is considering the possibility of acceptance of bullion bars refined by Indian refineries for delivery through its contracts.

The refinery applying to MCX will be subject to screening process including all related audits.

MCX audit will include but financial parameters, supply-chain and responsible sourcing, refining and assaying ability. Moreover, on an ongoing basis, pro-active monitoring including surprise audits shall be undertaken, said MCX.

Once MCX shortlists a refiner in good delivery list, after due completion of screening process, the refiner has to execute an agreement and submit necessary collaterals that may be in the form of bank guarantee, fixed deposit and personal guarantee.

The empanelment of refiners shall be for a specific refinery at a specific location for a limited time-period, which is renewable.

The refiners need to comply with standards prescribed by BIS, NABL and other such regulatory authorities besides the exchange’s regulations on the process, quality, technical parameters such as the size of the bar, mandatory markings on the bar, product finish, permitted tolerances for weight and purity, net worth and financial undertaking.

Currently, MCX accepts only serially numbered gold and silver bars of the specified quality standard of London Bullion Market Association approved refiners, along with bars of Emirates Gold.

The specified purity/fineness for the Gold and Gold Mini contracts is 995 (with provision to deliver higher quality with proportionate premium), while for the Gold Guinea and Gold Petal contracts it is 999; and for the Silver, Silver Mini and Silver Micro contracts, the fineness is 999.

Courtesy: The Hindu Business Line