Statutory committees must be constituted by bullion exchanges and bullion clearing corporations as specified by the Authority. The Authority prescribes the required committees and the framework for their composition, quorum and functions, creating a committee-based governance mechanism for bullion market infrastructure institutions.

Bullion exchanges and bullion clearing corporations must segregate their functions into critical operations; regulatory, legal, compliance, risk management and customer grievances; and other functions, including business development. Critical operations and regulatory, legal, compliance, risk management and customer-grievance functions must receive higher priority in resource allocation. Resource adequacy for these two priority verticals must be assessed periodically and objectively.

Governing boards, directors, committee members and key management personnel of bullion exchanges and bullion clearing corporations must comply with the prescribed Code of Conduct. Directors and key management personnel must be fit and proper persons. Known wrongdoing must be reported immediately to the governing board or the Authority. Non-compliance or conflicts of interest may lead to action, including removal or termination of appointment, following an opportunity of being heard.

Appointment, renewal, removal, termination and compensation of a managing director require prior approval of the Authority. Service is limited to terms of no more than five years, with a fresh appointment process after the first term, an aggregate maximum tenure of ten years, and a maximum age of sixty-five years. Independence restrictions prohibit specified shareholder, member and associated-entity interests or positions. Removal for non-compliance requires governing board action and prior approval, while the managing director must receive an opportunity of being heard before removal or termination.

Appointment and re-appointment of non-independent directors require prior approval of the Authority. Public interest directors require prior approval, may serve renewable three-year terms subject to performance review, and must be below seventy-five years of age. They cannot hold simultaneous board positions with specified subsidiaries or other Market Infrastructure Institutions, must disclose conflicts involving services to trading or clearing members, and are subject to a three-year cooling-off period before becoming non-independent directors or directors of the relevant subsidiary.

Governing boards of bullion exchanges and bullion clearing corporations must include non-independent directors, public interest directors and a managing director, with public interest directors at least equal in number to non-independent directors. Trading and clearing members, their associates and agents are generally barred from board membership, subject to specified exclusions. Public interest director parity is required for quorum and valid voting. Boards must collectively maintain prescribed expertise, including bullion and securities markets, finance, legal and regulatory practice, technology, risk management, management or administration.

Record-keeping obligations require bullion exchanges and bullion clearing corporations, in addition to duties under other applicable laws, to maintain and preserve all books, registers, documents and records concerning the issue or transfer of their securities for at least eight years. The obligation covers records connected with securities issuance and transfers and establishes a minimum preservation period for compliance purposes.

Bullion exchanges and bullion clearing corporations must submit quarterly shareholding disclosures to the Authority within fifteen days after each quarter ends. Each filing must identify the ten largest shareholders, including the number and percentage of shares held by each, and must name all shareholders who acquired shares during the relevant quarter.

Shareholding-limit monitoring requires bullion exchanges and bullion clearing corporations to maintain an adequate mechanism for continuous compliance with applicable shareholding conditions. The framework must operate at all times to ensure adherence to ownership limits governing these market institutions.

Direct or indirect acquisition or holding of equity shares or voting rights in a bullion exchange or bullion clearing corporation requires the shareholder to be a fit and proper person, subject to an exception for holdings below two per cent. Holdings exceeding five per cent of paid-up equity shares or voting rights require prior approval. Applications must be made through the concerned bullion exchange or bullion clearing corporation, which must verify shareholder declarations or undertakings and forward the application with its recommendation.

Shareholding in a bullion clearing corporation must be held by specified recognised exchanges or clearing corporations with at least twenty-six per cent of paid-up equity capital, or by a joint venture of recognised market infrastructure institutions holding at least fifty-one per cent. In a joint venture structure, the relevant bullion exchange or recognised stock exchange must hold at least fifty-one per cent within the joint venture. Other persons, individually or acting in concert, cannot directly or indirectly hold more than twenty-five per cent of paid-up equity capital.

Shareholding in a bullion exchange must be held through a qualifying bullion or stock exchange, or through a joint venture of market infrastructure institutions meeting prescribed ownership thresholds. Where a joint venture holds the exchange, qualifying bullion exchanges or stock exchanges must directly or indirectly retain the required majority shareholding in that joint venture. Other persons may not, individually or with persons acting in concert, directly or indirectly acquire or hold beyond the prescribed ceiling.

Ownership limits for shares or voting rights in a bullion exchange or bullion clearing corporation apply continuously, subject to specified exceptions. Shareholding includes instruments directly or indirectly owned or controlled that confer a future entitlement to equity or rights over equity.

Bullion exchanges and bullion clearing corporations must maintain a minimum net worth of USD 10 million at all times, subject to higher requirements specified as a risk-management measure based on the nature and scale of business. They cannot distribute profits to shareholders until the prescribed net worth is achieved. An audited net worth certificate for the preceding financial year, issued by the statutory auditor, must be submitted to the Authority by 30 September annually.

Every bullion clearing corporation must maintain an orderly winding-down framework for critical operations and services in voluntary and involuntary scenarios. The framework must provide for timely settlement, cessation or transfer of positions and for transfer of members' collateral, deposits, margins and other assets to a bullion clearing corporation taking over operations. Related matters necessary for an orderly transition must also be addressed.

A bullion clearing corporation has priority to recover dues arising from the clearing and settlement functions of its bullion clearing members. Such recovery may be made from the members' collaterals, deposits and assets, with the corporation's claim prevailing over any other liability of or claim against the members.

Settlement and netting for bullion exchange and bullion clearing corporation transactions follow the netting or grossing procedures prescribed in their respective bye-laws. Payments and settlements are final, irrevocable and binding once the money, securities or other transactions payable on a gross or net settlement have been determined, irrespective of actual payment. The right to appropriate contributed collateral, deposits or margins for settlement or other obligations has priority over other liabilities or claims against the contributor.

Bullion clearing corporations must comply with the International Financial Services Centres Authority (Bullion Market) Regulations, 2025, the agreement entered into with the relevant bullion exchange, and any additional conditions imposed by the Authority. The compliance obligations operate cumulatively.

Regulation 12 requires the bullion exchange to protect consumer interests, regulate bullion contracts, and promote transparent and orderly bullion market development. Its functions include regulating trading members and intermediaries, enforcing good delivery standards, preventing fraudulent and unfair trade practices, and supporting consumer education and intermediary training. The exchange may obtain information and conduct inspections, inquiries and audits, levy fees and charges, set standards for bullion quality, quantity and verification, and establish vaulting and transport standards in consultation with the bullion depository.

A bullion exchange must engage a bullion clearing corporation through a written agreement setting out rights, obligations, conditions for admission of securities to clearing and settlement, risk management measures, charges, and related matters. Its arbitration mechanism must cover disputes or claims arising from clearing and settlement of trades executed on the exchange.