Uti To Lodge Eight Scrips In Depositary

Thus, share certificates held by UTI through portfolios of its different schemes, will be stored electronically.

The Stock Holding Corporation of India Ltd which is the custodian for UTI, will be the depository participant for the countrys largest mutual fund.

Chief general manager (secondry market operations) B G Daga said an internal committee comprising senior UTI officials, SHCIL representative and NSDL officials are working out the detailed modus operandi for dematerialising the portfolio.

Besides UTI, Life Insurance Corporation, General Insurance and Morgan Stanley will also switch to the depository system.

SHCIL managing director R Chandrasekharan told Business Standard that his organisation has approached all its clients for participating in the depository. He said: We will act as the depository participants for UTI and all other clients, including LIC, GIC and Morgan Stanley. They have shown inclination towards dematerialising portfolios of different schemes.

 

The list of eight companies with which the depository will commence operations includes State Bank of India, Reliance Industries, ACC, L&T, Siemens, IDBI, ICICI and HDFC.

Daga said: We will initially dematerialise part of portfolios in certain schemes involving these stocks. We will not dematerialise the entire portfolio of any scheme and carry out the process in phases. The committee is working on the matter.

UTI is cautious as far as the process of dematerialisation goes. Adds Daga: We will initially see demand for shares to be stored in the electronic form. Depending on the feedback, we will decide how fast we should go about it.

Daga also said the committee is also looking into a scheme-wise segregation of the shares of each company so that a part of the UTI holding remains in paper form and part is stored electronically.

It depends on our clients. If the investor, who can be a foreign institutional investor and or a domestic financial institution, demands for a dematerialised lot of shares, we will offer dematerialised lot and if there is a demand for physical paper then UTI will sell shares in physical form, said Daga.

SHCIL already has the custody of shares held by these market players and if its client decide to opt for dematerialisation, substantial amount of paper work will be reduced. Marketmen have expressed scepticism about the successful begining of the depository. However, everyone unanimously says that it is a must for Indias capital markets.