Hi GM…I have applied for SB earlier tranches in Sep and Nov 2016. When I see the current issue March 17 priced higher than old issues, I get a doubt as to why I should apply in new issue and why not buy in old series if I need to . Can you pl let me know if I am missing anything like buying in Primary Vs Secondary or losing the interest eligibility on the bonds?
Thanks and Regards
TKRam
Currently there is an operational issue with how SGB is settled when bought on the exchange. Most brokers aren’t allowing it, (including us).
Assume you have a CDSL demat account with us, you get on the exchange and place a buy order. The person who sells the SGB to you is a NSDL account holder. So when we receive the SGB units from exchange, it comes to our NSDL pool account (since the person who sold held it in NSDL demat). RBI currently doesn’t allow inter DP transfer, what this means is that we can’t move it from our NSDL pool account to your CDSL account with us (only NSDL-NSDL or CDSL-CDSL transfers allowed).
So if we allow purchase on the exchange, we run the risk of not being able to transfer to client demat. We have hence disabled buying of SGB on exchange. You can only exit/sell.
So yeah, currently the way to enter into SGB is through the primary issue.
Hi @nithin, I suppose this is not the case for equity shares. Just for a clarification, could you please share the reason why inter DP transfers are restricted for SGB but not for equity shares?
Donno why, it is a restriction from RBI. There are already representations made to them from brokers associations.
Thanks for the response to help me decide in time to apply for SGB
Dear Team,
I have an account with Zerodha and was looking to invest in Sovereign Gold bonds (SGB).
Since there has been hardly any new issue of SGBs, i was trying to directly buy through BSE/NSE - but as mentioned above, the NEST platform of Zerodha is not allowing my orders.
Would request if you can update your current stance on whether SGB can be bought or not on Zerodha.
Also, as mentioned above - has there been any result of the above mentioned representation to RBI from the brokers association!
Thanks in advance.
Hey,
The Depositories are in the process of building systems that would allow ‘on-market’ and ‘off-market’ inter depository transfer of SGB’s soon. There was a communique issued by CDSL recently in this regards. Once this system is live, we’ll collect the declaration from our clients, as is the need from the Depository and allow purchase of SGB’s through the secondary market.
thanks a ton for the comprehensive revert.
It was really helpful, will surely sign-up for the declaration. Cheers!