New Delhi: Leading bourse BSE on Friday said Sovereign Gold Bonds (SGBs) will be traded under the 'G' group of equity cash segment along with other government securities.
Sovereign gold bonds will be settled on T+2 basis in the demat account of the investors, the BSE said in a circular.
T+2 means that trades are settled two working days after the trading takes place.
For the purpose of risk management, the applicable margin for sovereign gold bond will be 10 per cent, National Stock Exchange (NSE) said in a separate circular.
Sovereign gold bonds will begin trading on the stock exchanges for the first time from June 13, providing investors a greater choice to diversify portfolio without the need to buy the metal in physical form.
Top exchanges BSE and NSE announced the launch of such bonds from Monday after the Reserve Bank of India (RBI) and markets regulator Sebi cleared the trading in the new instrument recently.
The scheme was announced by the government on October 30, 2015. These bonds are issued by the RBI on behalf of the government.
The minimum investment size in the secondary market will be as low as 1 gm. The tenure of the bond is eight years with an exit option from fifth year to be exercised on the interest payment dates.
The bonds will carry an interest rate of 2.75 per cent (fixed rate) per annum on the amount of initial investment.
Interest is to be paid half-yearly and the last interest will be payable on maturity, along with the principal.
The product is accompanied with few beneficial tax features. Though the long-term capital gains tax is applicable after three years and the same will be zero if redeemed after full maturity only.
The NSE and BSE have been appointed by Sebi for acting as receiving office for collecting subscription bids from investors.
So far, three tranches of the bonds have been issued and the fourth tranche is expected soon.
The RBI notified June 13 as the date for commencement of trading of SGBs issued in the first tranche. It will notify similar dates for the subsequent tranches later, all such bonds will be available on the exchanges for trading.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
Sovereign gold bonds will be settled on T+2 basis in the demat account of the investors, the BSE said in a circular.
T+2 means that trades are settled two working days after the trading takes place.
For the purpose of risk management, the applicable margin for sovereign gold bond will be 10 per cent, National Stock Exchange (NSE) said in a separate circular.
Sovereign gold bonds will begin trading on the stock exchanges for the first time from June 13, providing investors a greater choice to diversify portfolio without the need to buy the metal in physical form.
Top exchanges BSE and NSE announced the launch of such bonds from Monday after the Reserve Bank of India (RBI) and markets regulator Sebi cleared the trading in the new instrument recently.
The scheme was announced by the government on October 30, 2015. These bonds are issued by the RBI on behalf of the government.
The minimum investment size in the secondary market will be as low as 1 gm. The tenure of the bond is eight years with an exit option from fifth year to be exercised on the interest payment dates.
The bonds will carry an interest rate of 2.75 per cent (fixed rate) per annum on the amount of initial investment.
Interest is to be paid half-yearly and the last interest will be payable on maturity, along with the principal.
The product is accompanied with few beneficial tax features. Though the long-term capital gains tax is applicable after three years and the same will be zero if redeemed after full maturity only.
The NSE and BSE have been appointed by Sebi for acting as receiving office for collecting subscription bids from investors.
So far, three tranches of the bonds have been issued and the fourth tranche is expected soon.
The RBI notified June 13 as the date for commencement of trading of SGBs issued in the first tranche. It will notify similar dates for the subsequent tranches later, all such bonds will be available on the exchanges for trading.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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