GOLD EXCHANGE TRADED FUNDS :

Gold Exchange Traded Fund scheme shall mean a mutual fund scheme that invests primarily in gold or gold related intruments.

SEBI (Mutual funds) Regulations, 1996 permits Gold Exchange Traded Fund (GETF) to invest primarily in –

(a) Gold.

(b) Gold related instruments i.e. such instruments having gold as underlying, as are specified by SEBI from time to time.

A gold exchange traded fund scheme is subject to the following investment restrictions:

(a) the funds of any such scheme should be invested only in gold or gold related instruments in accordance with its investment objective, except to the extent necessary to meet the liquidity requirements for honouring repurchases or redemptions, as disclosed in the offer document; and

(b) pending deployment of funds in accordance with clause (a), the mutual fund may invest such funds in short term deposits of scheduled commercial banks.