National Stock Exchange (NSE) has directed its members, including stockbrokers, to discontinue the sale of digital gold on their platforms by September 10. 

The direction came after capital markets regulator SEBI had said that certain members were providing a platform to their clients for buying and selling digital gold. 

The SEBI, through a letter dated August 3, had informed the exchange that the said activity was in contravention of the Securities Contracts (Regulation) Rules (SCRR), 1957, and that the members should refrain from undertaking any such activities. 

The SCRR rules restrict all members from engaging either as principal or employee in any business other than that of securities or commodity derivatives except as a broker or agent not involving any personal financial liability. 

Accordingly, NSE directed members not to carry out such activity and comply with the regulatory requirements at all times. 

“Members currently engaging in the activity shall cease to undertake all activities in this regard within one month from the date of this circular during which necessary communications regarding the discontinuation shall be made to the respective clients,” NSE said in a circular dated August 10. 

TradeSmart Chairman Vijay Singhania said digital gold units were not issued by any regulated entity. There was no method to check whether the digital gold certificate was backed with physical gold or not.