'Sebi, IRDA working together to resolve ULIP'

Capital market regulator Securities and Exchange Board of India (Sebi) today said it was working together with the insurance watch dog to expeditiously find a "legally binding" resolution to who controls unit linked products and there are no restrictions on investment in existing schemes.

"We want to do it (move appropriate court) quickly," Sebi Chairman CB Bhave said on the sidelines of a CII Conference on Indian Financial Markets on when it would move the court for resolving the jurisdiction issue.

He also told the foreign institutional investors apprehensive about the turf war between the two regulators that they can continue to invest in current Unit Linked Insurance Plans (ULIPs), which have a portfolio of over Rs 92,000 crore.

Sebi's latest direction is against floating any new product, he clarified. "FIIs should know what the correct position is and the correct position is that investors can continue to invest in current ULIPs and no new ULIPs are allowed," Bhave said.

Sebi had last week said that all ULIPs issued after April 9 will have to have its approval. This was questioned by insurance sector regulator IRDA. Yesterday, the market watchdog had moved the Supreme Court and some High Courts to guard against any ex-parte decision.

On April 10, Sebi had banned 14 life insurance companies, including those belonging to Tatas, SBI, ICICI, HDFC and Reliance Anil Ambani group, from raising funds through ULIP without its approval.

Later on April 14, Sebi came out with a second order that exempted the existing ULIP schemes of these 14 players from the ban.