MFs await nod to invest in Fortune 500 firms

By agencies   |   Tuesday, 22 November 2005, 08:00 Hrs
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NEW DELHI: With the market regulator SEBI having no objection, Indian mutual funds are now awaiting the Reserve Bank's nod to invest in the equity of Fortune-500 companies.

The matter is long pending with high-level committee on capital markets (HLC) comprising heads of RBI, SEBI, IRDA and officials of finance and company affairs ministries, sources said adding the SEBI has no objection in allowing Indian mutual funds to invest up to $1 billion in equity of companies listed in indices such as Dow Jones Global Titans Index.

A senior SEBI official confirmed this and said it was for RBI to come up with the guidelines, as mutual funds need to invest the money in foreign currencies.

The present norms permit Indian mutual funds to invest in equity of MNCs, which have a joint venture in India with at least 10 percent. There are about 47-48 such companies.

Many of the global corporations such as Wal-Mart, Microsoft, Intel, Vodafone, Bank of America, Barclays and UBS do not have joint ventures in India but are part of the DJ Global Titans Index.

Country's leading mutual funds such as UTI AMC, Principal PNB, Templeton, DSP Merrill Lynch, ICICI Prudential and HDFC Standard Life have sought changes in the investment pattern. They also sought permission for launching offshore funds that invest in such global indices.

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