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Sebi allows non-bank custodians to manage gold, related instruments

The move is aimed at reducing concentration of custodial services for gold or related instruments, Sebi said

Press Trust of India  |  New Delhi 

Sebi
Sebi has also allowed sponsors or AMC to invest in close-ended mutual fund schemes

Market regulator has revised mutual fund regulations to permit non-bank Sebi-registered custodians to manage or gold-related instruments.

Currently, only the banks that are registered as custodians with (Sebi) are permitted to manage exchange-traded funds (ETFs) and other gold-related products.

"In case of a 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," said revising the mutual fund norms.

After the revision of norms, non-banking custodians as well as banking custodians can manage gold and other gold-related products.

For this, the regulator has amended (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

The move is aimed at reducing concentration of custodial services for gold or related instruments, 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.

First Published: Mon, March 09 2020. 13:40 IST
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