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CS Professional · IFSCA - Regulations, Listing and Compliances · India International Bullion Exchange (IIBX)

A vault manager in GIFT IFSC accepts gold from Sanjay Refiners and issues a bullion depository receipt, but never conducts any independent check of purity or quantity at deposit. Which view is correct under the IFSCA bullion framework?

The practice is non-compliant. A vault manager must verify the quantity and purity of deposited bullion and keep it securely before issuing a depository receipt, since the receipt represents real bullion. Later exchange fees or the clearing corporation's role do not remove this duty.

  1. AThis is non-compliant, because the vault manager must verify and assay bullion and hold it safely before issuing the receiptCorrect
  2. BThis is compliant because receipts need no assurance of the underlying bullion
  3. CThis is compliant if the exchange later pays a fee
  4. DThis is compliant because only the clearing corporation tests purity

Explanation

A receipt is backed by actual bullion, so the vault manager must verify quality and quantity and safeguard it, with receipts issued only against bullion actually held. Omitting checks breaks the integrity of the receipt. Later fees or clearing roles do not cure this.

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