SEBI Proposes ₹75 Crore Net-Worth Floor and Wider Bullion Scope for Vault Managers

Current development

SEBI has proposed a significant expansion of the regulatory framework for vault managers handling bullion in India’s securities market. A consultation paper published on 11 August 2026 seeks to widen the scope of the SEBI (Vault Managers) Regulations, 2021 and create a more uniform framework for bullion stored in SEBI-registered vaults.

One of the key proposals is to increase the minimum net-worth requirement for registered vault managers from ₹50 crore to ₹75 crore. SEBI is also considering extending the framework beyond its current scope so that bullion underlying additional securities-market products can be covered under a common regulated vaulting structure.

Why SEBI is reviewing the vault-manager framework

The Vault Managers Regulations were introduced to regulate entities involved in the storage and safekeeping of bullion connected with Electronic Gold Receipts. Since then, the securities market has developed a broader range of bullion-linked products and custody arrangements.

SEBI’s consultation indicates that the regulator is evaluating whether economically similar physical bullion should continue to be governed through different arrangements depending on the product it supports. A wider regulatory perimeter could create a more consistent baseline for governance, custody controls, insurance, reporting and operational risk management.

Minimum net worth proposed at ₹75 crore

The consultation proposes raising the minimum net worth required for a registered vault manager from ₹50 crore to ₹75 crore. If adopted, the higher threshold would increase the financial-entry requirement for entities undertaking regulated vaulting activity.

Existing vault managers and prospective applicants would need to assess their capital position against the revised threshold. Finance and compliance teams would also need to consider how the higher requirement interacts with business expansion, insurance costs, technology investment and operational-resilience obligations.

Scope could extend to more bullion-backed products

SEBI’s public-comment framework states that the proposed amendments are intended to facilitate expansion of the Vault Managers Regulations to cover bullion underlying ETFs, derivatives on bullion and other SEBI-specified bullion-related instruments stored in SEBI-registered vaults.

This is important because the proposal is not merely about changing a registration threshold. It could change which physical bullion holdings fall within a common regulatory framework and which market participants must rely on SEBI-registered vault infrastructure.

What this may mean for mutual funds and clearing corporations

The consultation is relevant to more than vaulting companies. Mutual funds operating bullion-backed ETFs, clearing corporations supporting physically settled bullion derivatives and other market infrastructure participants may need to revisit custody arrangements, service-provider due diligence and contractual controls if the proposal is finalised.

Finance and compliance teams should therefore map existing bullion-storage arrangements, identify the entities responsible for safekeeping and determine whether those arrangements would fall within the proposed expanded perimeter.

Governance and risk controls will remain central

Physical bullion custody creates risks that differ from ordinary dematerialised securities. These include physical loss, fraud, access-control failures, inventory-reconciliation issues, insurance gaps, operational disruption and technology failures affecting records or reporting.

For auditors and assurance professionals, a broader regulated vaulting framework would increase the importance of reviewing physical verification, record integrity, segregation, access controls, insurance, incident management, business continuity and the linkage between financial-market products and the underlying bullion.

Public comments are part of the rule-making process

The 11 August paper is a consultation document and should not be treated as a final operative amendment. SEBI has invited comments on whether the proposed amendments are adequate for expanding the scope of the regulations and on the draft operational framework.

Affected entities should therefore continue complying with the existing framework while monitoring the final outcome. At the same time, the consultation period is an appropriate point for gap analysis because a wider scope and higher net-worth requirement could require changes in capital planning, contracts, systems and governance.

Practical checklist for finance, compliance and audit teams

- Identify bullion custody arrangements supporting EGRs, ETFs and bullion derivatives.

- Assess whether current or prospective vault managers satisfy the proposed ₹75 crore net-worth threshold.

- Review custody agreements, insurance coverage and physical-asset reconciliation controls.

- Evaluate business-continuity, cybersecurity and incident-response arrangements connected with vault operations.

- Track SEBI’s final amendments and implementation timeline before treating the consultation proposals as binding.

Key takeaway

SEBI’s 11 August 2026 consultation proposes a broader regulated framework for bullion custody and a higher ₹75 crore minimum net-worth requirement for vault managers. If finalised, the changes could affect vault managers as well as mutual funds, clearing corporations, compliance teams and auditors that rely on physical bullion infrastructure. The proposals are not yet final, but affected entities should begin assessing their existing custody and control framework.