Currently, only the banks that are registered as custodians with Securities and Exchange Board of India (Sebi) are permitted to manage gold exchange-traded funds (ETFs) and other gold-related products.
"In case of a gold exchange-traded fund scheme, the assets of the scheme being gold or gold related instruments may be kept in the custody of a custodian registered with the board," Sebi said revising the mutual fund norms.
After the revision of norms, non-banking custodians as well as banking custodians can manage gold ETFs and other gold-related products.
For this, the regulator has amended Securities and Exchange Board of India (Mutual Funds) Regulations, 1996.
The amendments to the regulation were made after Sebi's board in February approved a proposal to allow bank and non-bank custodians to offer custodian services for gold or gold related instruments such as gold ETFs.
The move is aimed at reducing concentration of custodial services for gold or related instruments, Sebi had said.
Additionally, Sebi has also allowed sponsors or asset management companies (AMC) to invest in close-ended mutual fund schemes.
The sponsor or asset management company has to invest either at least one per cent of the amount which would be raised in the new fund offer or Rs 50 lakh, whichever is less "provided that the investment by the sponsor or asset management company shall be made in such option of the scheme, as may be specified by the board," Sebi said.
Presently, the investment by the sponsor or AMC is mandatory in all schemes, except closed-ended schemes.
Sebi in its board meeting said, "in order to bring uniformity across schemes, the board has decided that sponsor or AMC shall invest in close ended schemes also.