Uti Awaits Cdsl Start For Full Us-64 Demat

The Unit Trust of India will await the commencement of the Central Depository Services Limited(CDSL),before it decides to dematerialse the entire corpus of US-64. The CDSL, which has been promoted by the BSE is awaiting the final clearance before it starts operations shortly.

"Currently, we have to pay a custodial fee of 4.5 basis points. It may not be too high for an individual investor. But when it is a substantial amount from the fund's point of view," P J Nayak, acting chairman and executive trustee, UTI said at a press briefing in Mumbai.

The US-64 has a corpus size of around Rs 20,000 crore now. "Even by conservative estimates, the custodial fees alone would amount to Rs 7 crore. Since CSDL has already announced that it would not be charging any custodial fees, it makes economic sense to wait for the CSDL to start," he added.

Earlier US-64 had given the option of dematerialisation only to investors who were already invested in the scheme.

But from July 1, 1998, even the new investors have the option of dematerialisation. The scheme has already received applications for dematerialisation worth Rs 117 crore from fresh investors.

This is a far cry from the 70-80 requests it had received for demat from existing investors a couple of weeks back.

"This a small beginning, but nevertheless a very encouraging start. This only goes on to prove the awareness of demat is spreading among the smaller investors," Nayak added.

The Unit Trust of India has set a deadline of three months for dematerialising the units of the schemes which are listed on the bourses currently.

The UTI has already dematerialised about 80 per cent of the its holding in shares in which institutions have to compulsorily deal in the electronic form.

Explaining the rationale for holding the remaining 20 per cent in physical form, Nayak said: " Around 20 per cent is still being held in the physical form for some unforeseen contingency.

Also, 80 per cent demat is good enough since all the scrips are no traded at any given point of time."

"We are now waiting for the volumes in the depository to pick up before we can dematerialse the entire holdings in these scrips," Nayak said.