With reference to the proposed Gold Exchange in India, consider the following statements: Buying and selling of Electronic Gold Receipts (EGRs) on the Gold Exchange would be done on the basis of a deposit of underlying physical gold. RBI would be the sole regulator of the entire ecosystem of the proposed exchange. Which of the statements given above is/are correct?

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

Answer: A

Notes:

Statement 1 is correct: Gold Exchange would be a national platform for buying and selling EGRs issued against physical gold. Investors can trade in EGRs on stock exchanges and the proposed gold exchange. The transaction in a gold exchange has been divided into three parts—conversion of physical gold into EGR, trading of EGR on a stock exchange and conversion of EGR into physical gold.
Statement 2 is incorrect: SEBI would regulate the entire ecosystem of the proposed gold exchange. It would be the sole regulator for the exchange, including for vaulting, assaying gold quality and fixing delivery standards.

Source: Article