EPFO checks into Dalal St, to invest up to Rs 15K cr next year
7 Aug 2015 6:17 AM IST
In a big boost to equity markets, fund-flush Employees Provident Fund Organisation on Thursday entered Dalal Street through exchange-traded fund route with an initial corpus of Rs 5,000 crore, which could go up to nearly Rs 15,000 crore next year.
The first investment, announced here by Labour Minister Bandaru Dattatreya in the presence of top market participants, would be made through SBI Mutual Fund's two index-linked ETFs -- one to the BSE's Sensex and the other to NSE's Nifty.
Dattatreya said EPFO subscribers would get more than the 8.75 per cent return they get now by way of annual interest of their money and this would increase as the Fund increases its play
in the market.
Significantly, the minister ruled out the possibility of the Fund entering the capital markets through other ETFs or investing in equities, understanding well the stiff opposition from labour unions. "As of now there is no plan to invest in any other ETF other than the equity ETF," Dattatreya said.
"The Finance Ministry has allowed us to invest up to 15 <g data-gr-id="21">per cent</g> of incremental flow of the EPFO money into equities, from the present 5 <g data-gr-id="22">per cent</g> now of the Rs 1 trillion of <g data-gr-id="20">investible</g> money the Fund has.
"The present 5 per cent cap was taken after the consultants recommended to initially keep the EPFO investments in equities at <g data-gr-id="24">level</g>," Dattatreya said.
Ready to revisit P-Notes on SIT suggestions: Sebi
Market regulator Sebi on Thursday said it will look into the suggestions of the Special Investigation Team (SIT) on black money to ensure sufficient checks are in place with respect to overseas investments via P-Notes route. The Supreme Court-appointed panel had recently suggested Sebi to put in place regulations to help identify individuals holding participatory notes or offshore derivative instruments (ODIs).
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