NSEL e-series investor’s concern

All of you already know about NSEL (National Spot Exchange Ltd) payment crisis about 5600 crore through media. Investor now worried about their respective e-series metal holding like e-gold, e-silver etc with NSEL. From 6 August, 2013 the trading in NSEL is totally close. It is the main concern for investors.

Earlier, Investors were told that they could take physical delivery if they wanted to close their position. Even de-mat account with many brokers is not reflecting the holding position of e-series metal. Due to inordinate delay in physical delivery, people are now questioning if there are enough gold and silver stock. NSEL staffs are also not replying proper about delay in future.

So now it is very important to know the procedure of converting e-series unit into physical delivery. Today we will discuss about this.

Procedure for Physical of e-series

• ·         The investor have to submit Delivery Instruction Slip (DIS) to the Depositary Participant (DP) along with the Surrender Request Form (SRF).
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• ·         The DP transfers the e-series unit to the account of NSEL based on DIS.
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• ·         DP then attest the signature of the investor on the Transfer Request Form (TRF) and handover the same to investor along with the acknowledge of the DIS.
• ·         The investor now submit DIS and SRF to the exchange specifying the centre of his choice from where he wants to take delivery.
• ·         The Unit holder shall fax the SRF and DIS acknowledgement to the exchange at fax no: 022-67269524 / 022-67619931 or mail to scanned copy at nsel_dp@nationalspotexchange.com
• ·         After receipt of the copy of DIS and SRF, exchange compute the making and packaging charges, Delivery charges, VAT/GST/CST and other dues , if any.
• ·         The Exchange then communicate the total amount due to investor through the email id provided in SRF. The client then required to make such payment through the DD/Cheque in the favour of “National Spot Exchange Ltd.”

In case the payment is more than Rs 50,000 the payment will be accepted by DD (demand draft) only.

For receive the delivery, the client is required to submit the original SRF and proof of identity at the delivery center.

At present the delivery center of NSEL are KOLKATA, CHENNAI, HYDERABAD, JAIPUR, MUMBAI, AHMEDABAD, DELHI, KOCHI, BANGALORE.

For more detail about any other query related investment, you can contact me through my email.

Warm regards,

Arvind Trivedi , Certified Financial Planner

Arvind.trivedi79@gmail.com

Which is better option Gold ETFs or e- Gold

Which one is good Gold ETF or e-Gold ?

Now a days this question is frequently asked by gold investors. As gold price has seen decline in the rate since last few months. Earlier people had only one option to purchase gold in physical form. It is important that before investing your funds in any instrument first look at pros and cons and compare the cost and return with similar available instruments. Three is different opinion in the market expert but majority of them prefer e-Gold due to its cost effective attribute. Let us find out whether we should go with Gold ETF or e- Gold.

Gold ETF: 

Gold ETFs are exchange traded mutual fund schemes that invest in physical gold. It is also known as paper gold. The prices of Gold ETFs are measured in terms of the net asset value (NAV). One unit represent 1 gm rate of gold. There are many charges like management and advisory fees, marketing and distribution expenses, custodian charges, trading brokerage and other operational expenses. Apart from these charges there is tracking errors which also affect the return of the Gold ETFs. For invest in Gold ETF you need de-mat and trading account with the broker.

It can be converted into physical delivery but there are different quantity criteria for different AMC. It is difficult to convert small quantity Gold ETF into physical gold. You can invest in it during 9:00 AM to 3:30 PM (exchange trading hours of weekdays).

Gold ETFs are taxed as Non equity mutual fund. If you sold in within one year you have to pay short term capital gain tax according to your tax slab.  If you sold it after one year then you have two options for paying long term capital gain tax, one is 10 % tax without indexation and the other one is 20% tax with indexation.

e-Gold: 

For invest in e-Gold you need a de-mat a/c with NSEL (National Spot Exchange Limited). In e-gold, investors are directly holding the gold units and NSEL do not charge for it to investors. Physical delivery in e-Gold is possible even in small quantity. The transaction cost is very low in NSEL compare with Gold ETF. You can trade during 10:00 AM to 11:30 PM on weekdays. The taxation of e-Gold is same as physical gold. If you held it less than 3 year you have to pay short term capital gain tax according to your tax slab. If you hold it more than 3 year then you have to pay 20% long term capital gain tax.

From above information one can easily judge that e-Gold has more edge than Gold ETF. The Gold ETF only score in the term of taxation.

For more detail about any other query related investment, you can contact me through my email.

Regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com