Morgan Stanley Asset Management (MSAM) is planning to dematerialise its portfolio holdings as well as offer the fungibility option to the unitholders of its domestic scheme, Morgan Stanley Growth Fund, through the National Securities Depository Ltd (NSDL).
MSAM is in talks with its registrar and transfer agents, Karvy Consultants, in this regard. The fund has approximately 1.4 million unitholding accounts.
J Welsley Mcdade, vice-president, Morgan Stanley Asia Ltd, told Business Standard: We are considering participating in the depository for our domestic scheme both as an investor and as a mutual fund.
Large corporate and institutional unitholders, who form nearly half the funds base, are expected to derive the maximum benefit out of the dematerialisation of units.
The scheme is also planning to dematerialise its own portfolio holdings. This would be done through their custodian, Stock Holding Corporation of India (SHCIL), which is already a depository participant with the NSDL.
Morgan Stanleys plans on making the units of their domestic scheme fungible follows the recent promulgation of an ordinance amending the Depositories Act which extends the stamp duty exemption to mutual fund units.
The earlier Depositories Act did not exempt units of mutual funds and shares of financial institutions from payment of stamp duty within a depository. But now the securities of all these institutions can be traded in the depository without attracting any stamp duty.
The Unit Trust of India recently announced its plans to allow the unitholders of two of its largest schemes, US-64 and Mastergain 92, the option to dematerialise their holdings.
