Mutual Funds Newsletter – May 19 to 23, 2014

SEBI has decided to increase cash transaction limit in mutual funds to Rs. 50,000 from Rs. 20,000 for an individual in a single mutual fund in each fiscal.

May 23, 2014 11:35 IST | India Infoline News Service
Top Stories

SEBI increases cash transaction limit in MFs to Rs. 50,000
SEBI has decided to increase cash transaction limit in mutual funds to Rs. 50,000 from Rs. 20,000 for an individual in a single mutual fund in each fiscal. The move is to protect the interests of investors in securities and to promote the development of, and to regulate the securities market. At present, cash transactions in Mutual Funds are allowed up to Rs. 20,000 for an individual in a single mutual fund in each financial year. However, repayment in the form of redemptions, dividend, etc. with respect to aforementioned investments shall continue to be paid only through banking channel. Along-with MMMF schemes, transaction in Liquid schemes shall be exempted from being reported by employees to compliance officer within 7 calendar days from the date of transaction, SEBI said in notification on Thursday.

SEBI pitches for tax relief on MFs
In order to enhance retail participation, SEBI (Securities and Exchange Board of India) has requested the Ministry of Finance to consider various tax incentives for mutual fund industry and a final decision in this regard would be taken by the new government, according to a media report. The SEBI had already approved these measures and has now written to the Finance Ministry to consider various tax sops for mutual funds. The regulator would push for implementation of these measures with the new government. SEBI has suggested the government to enhance the tax exemption limit under Section 80C of the Income Tax Act from Rs 1 lakh to Rs 2 lakh to help make various mutual fund schemes eligible for such tax benefits... Read more

FIIs invest more in debt securities on stable govt
Foreign institutional investors (FIIs) are planning to invest more funds in debt products as the new government under Bharatiya Janata Party (BJP) is expected to be a stable and growth-oriented government, according to market participants. FIIs were net-sellers in debt instruments in April but they invested more funds this month as hopes for a stable government became firm, after exit polls indicated BJP coming close to a simple majority in the Lok Sabha. FIIs bought debt securities worth Rs 6,130 crore till May 15... Read more

New Appointments

LIC Nomura MF announces change in fund manager
LIC Nomura Mutual Fund has announced that Y.D. Prasanna, Fund Manager shall cease to the Fund Manager and Key Personnel of LIC Nomura Mutual Fund Asset Management Company Ltd., with effect from the close of business hours on May 19, 2014. All the schemes managed by Y.D. Prasanna, will be managed by Killol Pandya, with effect from May 20, 2014. Accordingly LIC Nomura MF Bond Fund, LIC Nomura MF Government Securities Fund, LIC Nomura MF Interval Fund Series 1 - Yearly, LIC Nomura Fixed Maturity Plans and LIC Nomura MF Capital Protection Oriented Fund - Series 1,2 & 3 will be managed by Killol Pandya.

Satya Narayan Baheti takes charge as MD & CEO of IDBI Asset Management
Satya Narayan Baheti has been appointed as MD & CEO of IDBI Asset Management Ltd.
Baheti, a qualified Chartered Accountant, Company Secretary and a Certified Associate of Indian Institute of Bankers, brings with him over three decades of experience in the banking and financial industry. Prior to joining IDBI MF,  Baheti has been working as Chief General Manager in IDBI Bank and his experience varies across responsibilities such as Central accounts, Company secretarial functions, Compliance, Risk, Audit, Corporate finance, Capital markets and Resources mobilization, Company directorships, Institution building, Performance monitoring etc.

News In Focus

Facilitate listing of cos on non-compliant bourse: SEBI
SEBI (Securities and Exchange Board of India) asked stock exchanges to facilitate in a time-bound manner the process for listing of companies that are currently trading on non-compliant stock exchanges. SEBI had said that stock exchanges that have not achieved the prescribed turnover of Rs 1,000 crore on continuous basis by May 30 would be de-recognised. "The exclusively listed companies of non-compliant stock exchanges may opt for listing in nation-wide exchanges after complying with listing norms of main board or the diluted listing norms, if any, on or before the exit of the exchange, either on voluntary or compulsory basis," SEBI said in a circular... Read more
SEBI signs MoU with Botswana's regulatory authority
Securities and Exchange Board of India (SEBI) and Non-Bank Financial Institutions Regulatory Authority (NBFIRA), Botswana have signed a bilateral Memorandum of Understanding (MoU). The MoU was signed by UK Sinha, Chairman, SEBI and M Dube, Chairperson, NBFIRA on May 22, 2014 at SEBI Headquarters, Mumbai. Apart from promoting mutual assistance and exchange of information between the two authorities, the MoU seeks to establish and implement technical assistance and training program. SEBI has been actively extending and arranging for technical assistance to regulators in the Asia-Pacific and African region. Sinha observed that this MOU will help in promoting enhanced cooperation and building stronger relationship between SEBI and NBFIRA, Botswana through sharing of technical expertise and information exchange for more effective development and regulation of securities markets... Read more

15 stock exchanges to close operations on May 30
Over 15 of 20 stock exchanges in India have decided to close their operations in order to meet the new networth and trading norms by May 30, according to a media report. Over 11 regional stock exchanges (RSEs) have already submitted their exit applications to SEBI (Securities and Exchange Board of India), while the boards of four other exchanges will be meeting later this month to consider the resolutions related to closing down of operations, the report said. The Bombay Stock Exchange (BSE), United Stock Exchange, MCX Stock Exchange Ltd (MCX-SX), National Stock Exchange (NSE) and the Calcutta Stock Exchange will continue in business, the report added.

RBI for 20% credit enhancement by banks to corporate bonds
The Reserve Bank of India (RBI) plans to allow banks to provide partial credit enhancement of up to 20% of the entire bond issue to help companies raise funds for infrastructure projects. Credit enhancement could also be provided by improving the rating of bonds by two notches. The limit on partial credit enhancement will be set at whichever is lower---20% credit enhancement or the funds needed to raise the rating by two notches. The RBI on Tuesday released draft circular on allowing partial credit enhancements to corporate bonds and invited comments/feedback on it. It had, in its Second Quarter Review of the Monetary Policy 2013-14 announced on October 29, 2013 proposed to allow banks to offer partial credit enhancements to corporate bonds... Read more

Results this week

Edelweiss Financial Services Q4 net profit at Rs 61 cr
Edelweiss Financial Services reported a growth of 19% in net profit at Rs 61 crore in the fourth quarter ended March 2014. The company had registered a net profit of Rs 51 crore in the same quarter a year ago. The company's income during March 2014 quarter was at Rs 699 crore compared to Rs 600 crore in the same period a year ago, it said in a release... Read more

Reliance Life new business rises 40% at Rs. 1,934 cr in FY14
Reliance Life Insurance said the company has recorded a 40 per cent surge in its new business premium income in the financial year ended March 31, 2014. Helped by a significant increase in individual insurance segment, Reliance Life saw its new business premium collection rising to Rs 1,934 crore during by the end of 2013-14, from Rs 1,377 crore in the year-ago period.
For the entire life insurance industry, the new business premium income grew by 11.6 per cent to Rs 1.20 lakh crore for the year ended March 2014 from Rs 1.07 crore in the year-ago period, according to the Insurance Regulatory and Development Authority data... Read more

International News

ICI reports estimated long-term mutual fund flows
Total estimated inflows to long-term mutual funds were $4.06 billion for the week ended Wednesday, May 14, 2014, the Investment Company Institute reported. Equity funds had estimated outflows of $1.08 billion for the week, compared to estimated inflows of $762 million in the previous week. Domestic equity funds had estimated outflows of $2.32 billion, and estimated inflows to world equity funds were $1.24 billion. Hybrid funds, which can invest in stocks and fixed-income securities, had estimated inflows of $1.15 billion for the week, compared to estimated outflows of $402 million in the previous week... Read more

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