Currently, Indian mutual funds It is allowed to launch ETFs (Exchange Traded Funds) tracking gold. According to a notification issued on Tuesday, the regulator has amended the rules to enable the introduction of Silver ETFs.
SEBI said that Silver ETFs The meaning of the scheme is a mutual fund scheme which primarily invests in silver or silver related instruments having silver as the underlying product.
“Mutual fund schemes investing in exchange traded commodity derivatives may hold the underlying goods in case of physical settlement of such contracts,” the regulator said.
in silver case ETFs The assets of the scheme being silver or silver related instruments can be placed in the custody of a custodian registered with SEBI.
Silver ETF schemes will be subject to certain investment restrictions. The funds of any such scheme shall be invested only in silver or silver related instruments in accordance with its investment objective and the Mutual Fund may invest such funds in short-term deposits of scheduled commercial banks.
Hemen Bhatia, Deputy Head, ETFs, Nippon Life India Asset Management Limited said, Silver ETFs will provide investors with an additional option to invest in commodities as an asset class. “Furthermore, it will help investors to diversify their portfolios as part of their asset allocation, due to their low correlation with other asset classes.”
With regard to value, SEBI said that silver held by the Silver ETF scheme will be valued at the AM fixing price of London Bullion Market Association (LBMA) in US Dollar per troy ounce, with silver purity of 999.0 parts per thousand.
It is subject to change in metric measurement as per standard conversion rates as per RBI reference rate declared by Foreign Exchange Dealers Association of India (FEDAI) along with transport duty and notional customs duty and adjustment for conversion of US Dollar to Indian Rupee. Fees and other taxes. Experts said like Gold ETFs, Silver ETFs will also pass on the benefits of price efficiency, liquidity and convenience to retail investors.
In a separate notification, the regulator has amended the portfolio management rules to facilitate co-investment by investors of alternative investment funds (AIFs) through the portfolio management route.
A portfolio manager providing co-investment services to investors of AIF shall invest 100% of the assets under his management in unlisted securities and shall be exempted from certain requirements under the Portfolio Manager Rules, including minimum investment amount and minimum net worth.
Co-Investment Portfolio Manager means a Portfolio Manager who is a manager of Category I or Category II AIFs, provides services only to such category of AIF’s investors and invests only in unlisted securities of invested companies where such Category I or Category II AIFs invest.
SEBI said that the portfolio manager can appoint a member of the key investment team of the manager as the principal officer.
The Securities and Exchange Board of India (SEBI) said that the new rules will come into effect from December 9.