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TMI BlogSecurities and Exchange Board of India (Vault Managers) Regulations, 2021X X X X Extracts X X X X X X X X Extracts X X X X ..... lations unless the context otherwise requires, the terms defined herein shall have the meanings assigned to them, and their cognate expressions shall be construed accordingly, - (a) Act means the Securities and Exchange Board of India Act, 1992 (15 of 1992) ; (b) Accredited refineries means refineries empanelled by the Stock Exchanges; (c) Assayer means a person engaged in the process of assessing the purity or quality of gold; (d) Beneficial Owner means a person whose name is recorded as such with a depository/depository participant; (e) Board means the Securities and Exchange Board of India established under section 3 of the Act; (f) Change in control , in relation to a Vault Manager being a body corporate, shall be construed with reference to: (i) the definition of control in terms of regulation 2(1)(e) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 as amended from time to time if its shares are listed on any recognized stock exchange; (ii) in any other case, change in the controlling interest in the body corporate; Explanation ─ For the purpose of sub-clause (ii), the expression controlling inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mencement of these regulations shall make an application to the Board for grant of a certificate of registration. (2) An application for grant of a certificate under sub-regulation (1) shall be made in Form A of the First Schedule and shall be accompanied by a non-refundable application fee in the manner as specified in the Second Schedule. Eligibility criteria 4. For the purpose of grant of certificate of registration, the applicant shall fulfil the following criteria, namely: (a) The applicant shall be a body corporate incorporated in India. (b) The applicant shall have the minimum net worth of fifty crores rupees. Explanation ─ For the purposes of this regulation, the expression net worth shall have the same meaning as assigned to it under the Companies Act, 2013. (c) The applicant shall furnish refundable Financial Security Deposit as may be specified by the Board. (d) The applicant shall have the infrastructure as specified by the Board for safe deposit, storage and withdrawal of gold. (e) The applicant shall have adequate insurance to cover losses as may be specified by the Board. (f) The applicant shall have a Standard Operating Pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity for managing the business of the Vault Manager; (e) the applicant has prepared a Standard Operating Procedure (SOP) in accordance with regulation 4, setting out the systems and procedures to be followed by it for the effective and efficient discharge of its functions; (f) the applicant engages in any other business apart from providing vaulting services; (g) the applicant has been refused registration by the Board or whose certificate of registration has been cancelled by the Board; (h) the applicant or any of its employees is involved in any proceedings connected with the securities market or any other regulatory or enforcement agency; (i) the applicant is fulfilling the fit and proper criteria as specified by the Board in Schedule II of the Securities and Exchange Board of India (Intermediaries) Regulations, 2008; and (j) the grant of the certificate of registration is in the interest of the investors. (2) Notwithstanding anything contained in sub-regulation (1) the Board shall not consider an application made under regulation 3 unless the applicant meets the requirements mentioned in regulation 4. Procedure for grant of the certificate of registratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke an application to the Board in terms of Chapter V of the Securities and Exchange Board of India (Intermediaries) Regulations, 2008 to surrender the certificate of registration along with information that would satisfy the Board that: (a) the vaults have no pending obligations for physical delivery of gold; and (b) all disputes with respect to the gold deposited with it for the purpose of providing vaulting services as specified in these regulations have been satisfactorily resolved. (2) After surrender of registration, the financial security deposit furnished by the Vault Manager shall be refunded as per the procedure specified by the Board. 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neficial 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. Segregation of activities 13. Where a Vault Manager is carrying on any activity besides those laid down in these regulations, then the activities relating to his business as Vault Manager shall be separate and segregated from all other activities including earmarking separate space for storage of gold for trading of Electronic Gold Receipt and storage of goods for its other businesses. Maintenance of records 14. (1) The Vault Manager shall have systems for recording all transactions in electronic form pertaining to vaulting services. (2) The Vault Manager shall maintain the following records and documents, namely: (a) Documents to ensure that gold is traceable; (b) Details of storage, transfer and withdrawal of gold; (c) Purity, quantity and weight of deposited gold; (d) Creation and extinguishment of Electronic Gold Receipts; (e) Depo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Depository having account of Beneficial Owner; (d) Name and address of the beneficial owner; (e) PAN number of the Beneficial Owner; (f) Registration number of the Vault Manager and date up to which such registration is valid; (g) Name of the vault and its complete postal address; (h) Date of creation of Electronic Gold Receipt; (i) Rates of storage charges and other related charges, if any; (j) Description of the gold bars including particulars of quantity, weight and purity; (k) Bar numbers; (l) Purity Certificate; (m) Name of the refiner; and (n) Any other particulars as may be specified by the Board. (4) The Electronic Gold Receipt shall contain the following: (a) Electronic Gold Receipt number; (b) Name and address of the beneficial owner; (c) Registration number of the Vault Manager and date up to which such registration is valid; (d) Name of the vault and its complete postal address; (e) Date of creation of Electronic Gold Receipt; (f) Rates of storage charges and other related charges, if any; (g) Description of the gold bars including particulars of quantity, weight and purity; (h) Signature of the Vault Manager o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Manager. (2) Notwithstanding anything contained in sub-regulation (1), where the Board is satisfied that in the interest of the investors no such notice should be given, it may by an order in writing direct that the inspection of the affairs of the Vault Manager be taken up without such notice. (3) During the course of an inspection, the Vault Manager against whom the inspection is being carried out shall be bound to discharge his obligations as provided in regulation 22. Obligations of the Vault Managers on inspection 22 . (1) It shall be the duty of the Vault Manager whose affairs are being inspected and of every director, officer and employee thereof to produce to the inspecting officer, such books of accounts, records and other documents in its custody or control and furnish him with such statements and information relating to his activities as Vault Manager and within such reasonable period as the inspecting officer may require. (2) The Vault Manager shall allow the inspecting officer to have reasonable access to the premises occupied by it or by any other person on its behalf and also extend reasonable facility for examining the books, records, documents a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Board; (f) fails to update its systems and procedures as recommended by the Board; (g) fails to resolve the complaints of complainants or fails to give a satisfactory reply to the Board in this behalf; (h) makes a breach of the Code of Conduct specified in the Third Schedule; or (i) fails to pay the fees in accordance with these regulations; shall be dealt with in the manner provided under the Securities and Exchange Board of India (Intermediaries) Regulations, 2008. CHAPTER VII MISCELLANEOUS Power of the Board to issue clarifications and guidelines 28 . In order to remove any difficulties in respect of the application or interpretation of these regulations, the Board may issue suitable clarifications or guidelines. Amendment to the Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018. 29 . The Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018 shall be amended in the manner specified in the Fourth Schedule. FIRST SCHEDULE [See regulations 3 and 7] FORMS FORM A SECURITIES AND EXCHANGE BOARD OF INDIA (VAULT MANAGERS) REGULATIONS, 2021 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 4. Details of grievance redressal and dispute resolution mechanism 5. Details of outsourced activities 6. Certified copy of Standard Operating Procedure FINANCIAL INFORMATION 1. Net Worth certificate not older than three months from the date of application 2. Copy of audited financial statements for the last two financial years INFORMATION CONCERNING THE VAULT(s) 1. Number of vault(s) in respect of which recognition is sought: 2. Details of the vaults(s): i. Complete address of the vault(s) along with pin code, email address, contact person and contact number; ii. Year of construction of the vault(s); iii. Storage capacity of each vault; iv. Number of storage units; v. Dimensions of the storage units; vi. Whether the vault(s) is owned/hired/leased, along with documentary proof; vii. If hired / leased, please state duration of the hiring / lease; viii. Name and contact number of the jurisdictional Police Station and distance from the vault(s); ix. Name and contact number of the nearest fire station; x. Number of entry and exit points for the vault(s); xi. Details of the security agency along with contact number; xi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B SECURITIES AND EXCHANGE BOARD OF INDIA (VAULT MANAGERS) REGULATIONS, 2021 Certificate of Registration as Vault Manager I. In exercise of the powers conferred by sub-section (1) of section 12 of the Securities and Exchange Board of India Act, 1992 read with the regulations made thereunder for Vault Managers, the Board hereby grants a certificate of registration to _________________ as a Vault Manager subject to the conditions provided in the Act and as the case may be in the regulations made thereunder from time to time. II. The Registration Number of the Vault Manager is IN/VM/________ III. This certificate of registration shall be valid till it is suspended, cancelled or surrendered. Date: Place: MUMBAI By Order (Signature) For and on behalf of Securities and Exchange Board of India SECOND SCHEDULE [See regulations 3 and 7] FEES SECURITIES AND EXCHANGE BOARD OF INDIA (VAULT MANAGERS) REGULATIONS, 2021 1. Every Vault Manager shall pay a non-refundable fee of one lakh rupees along with the application for grant of certificate of registration. 2. Every Vault Manager shall pay a sum of ten lakh rupees as regis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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