CS Professional · IFSCA - Regulations, Listing and Compliances · India International Bullion Exchange (IIBX)
Kaveri Gold Ltd buys a bullion depository receipt (BDR) on IIBX. Which statement correctly describes what the BDR represents?
A bullion depository receipt is a receipt issued by a depository against bullion deposited with a vault manager, evidencing the holder's ownership of the underlying bullion. It is neither equity in the exchange nor a debt instrument, and it can be traded or converted to physical bullion.
- AA debt instrument paying fixed interest issued by the exchange
- BA share of equity in the exchange giving voting rights
- CA receipt issued by a depository evidencing ownership of underlying bullion held with a vault managerCorrect
- DA loan certificate issued by the clearing corporation against margin deposits
Explanation
A bullion depository receipt is issued against bullion deposited with a vault and evidences the holder's entitlement to that underlying bullion. It is not equity of the exchange, not a debt instrument, and not a margin-related loan certificate.
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