Regulation 12 - General obligations - Securities and Exchange Board of India (Vault Managers) Regulations, 2021

CHAPTER III DUTIES AND OBLIGATIONS OF VAULT MANAGERS General obligations 12 . (1) The Vault Manager shall be responsible for taking the deposit of the gold in the manner specified in Chapter IV of these regulations. (2) The gold deposited with the Vault Manager shall be in form and manner as specified by the stock exchange. (3) The Vault Manager shall store the gold only in recognized vaults. (4) The Vault Manager shall ensure the quality specifications of the gold at the time of deposit as per the gold standard. (5) The Vault Manager shall create Electronic Gold Receipt in accordance with regulation 18 . (6) The Vault Manager shall not create an Electronic Gold Receipt without underlying physical gold. (7) The Vault Manager shall maintain records of all transactions or operations pertaining to the recognized vault(s). (8) The Vault Manager shall have appropriate safekeeping measures, as may be specified by the Board, to ensure that deposits, records and documents are protected at all times. (9) The Vault Manager shall have Data Recovery System in place to prevent loss or damage of electronic records. (10) The Vault Manager shall take necessary steps to maintain the quality and quantity of gold stored in the recognised vault(s). (11) The Vault Manager shall have adequate internal controls to prevent any manipulative activity. (12) The Vault Manager shall devise procedures for periodic reconciliation of physical gold with the corresponding record of Electronic Gold Receipts maintained by it and the depositories. (13) In case of any discrepancy between electronic records of the depository and physical gold with the Vault Manager, the Vault Manager shall ensure to resolve the same expeditiously, failing which the Vault Manager shall be liable for such discrepancy. (14) The Vault Manager shall deliver the gold, to the beneficial owner of Electronic Gold Receipt, after receiving specific instructions from the Depository. (15) The Vault Manager shall ensure that while withdrawing gold, the Beneficial Owner acknowledges the receipt of the gold in the form and manner as specified by the Vault Manager. (16) The Vault Manager shall not differentiate between any of the depositors for providing vaulting services. (17) The Vault Manager shall not create Electronic Gold Receipt in its own name with respect to the gold stored in its recognized vaults. (18) The Vault Manager shall not sell, remove, dispose or create any interest, including by way of pledge or hypothecation, in the gold deposited in the vault(s) for the creation of Electronic Gold Receipt, except in such manner as may be specified by the Board. (19) The Vault Manager shall have adequate mechanisms for the purposes of reviewing, monitoring and evaluating the vault s systems, procedures and safeguards. (20) The Vault Manager shall ensure delivery of gold to the beneficial owner as per the gold standard. (21) The Vault Manager shall clearly disclose all charges related to its services on its website. (22) The Vault Manager shall submit periodic reports to the Board in such form and manner, including in electronic form, as may be specified by the Board in this behalf.