Govt may tweak Sebi Act and Securities Contracts Regulation Act

Mumbai The Ministry of Finance, the Board of Securities and Exchange of India (CBI) and the Reserve Bank of India (RBI) are working to bring digital gold with crypto assets under some control, as the risk of unregistered growth is increasing. Investments in regulated securities without investor protections.

To attract investors, the government plans to address the issue of transparency, unsubstantiated claims and high hopes for some companies.

As part of the plan, two government officials who spoke on condition of anonymity said the government could amend the Sebi law and the Securities Contract Act to make digital gold safe.

Prime Minister Narendra Modi on Saturday held a meeting with regulators to determine the long-term strategy of crypto assets. The Standing Committee on Finance held a meeting on Monday with stakeholders to discuss their views on ‘opportunities and challenges related to crypto finance’.

Mint reviewed a copy of the announcement made by the Standing Committee for discussions with associations and industry experts on crypto. Requests to the Ministry of Finance and the Ministry of Finance regarding digital gold control were not immediately answered.

The proposal to control the assets came after Sebi barred brokers and investment advisers from registering digital gold and other unregulated investment products in September and October. The regulator’s provision of such products is a violation of Sebe’s law and may result in fines and, in some cases, revocation of the license.

Some Fintech companies that sell digital gold have had to stop selling it, even as they have destroyed digital gold offerings to other unregulated parents.

Some companies have offered digital gold as an investment product to attract customers who are opposed to investing in equity products.

The ban opens up the possibility of arbitration, and RBI-controlled entities and unregulated organizations can supply digital gold without penalty. “There is a clear regulatory system. We do not sell digital gold because we think it is not a good product and not for any other reason,” said Nitin Kamat, CEO and founder of financial services platform Zeroda.

Seby is in talks with the government to secure digital gold in the upcoming budget. “The only way around this is if digital gold is referred to as an amendment to the Securities Contracts Act (SCRA) and the SAB Act. Then digital gold will be regulated, and all registered investment consultants, brokers and affiliates can offer digital gold.” The first of the two officials mentioned above.

“Essentially, all gold exchanges are under our control, so digital gold is not very widespread. Sebi has no concerns about controlling digital gold, but it needs to improve Sebi’s law and link it to gold exchanges. Digital gold is currently being offered in the regulatory space. “Our circuits are mainly aimed at fencing off the controlled areas,” said the second official.

The government is setting up a gold exchange under Sebi’s control. The regulator has already approved a framework for the implementation of gold exchanges, which will facilitate the trading of gold through electronic gold receipts. While issues around digital gold may be resolved in the next budget, differences between RBI and Sebi remain over who should control crypto assets.

“Sebi does not believe that there is a system for securing a crypto settlement because it has no basic assets and the RBI does not want to enter the market.” Authority. The Ministry of Finance is working on a draft law to regulate crypto and tax payments.

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