Govt introduces bill for more investment flexibility to trusts

The government on Thursday introduced a bill in the Lok Sabha to amend a nearly 130-year old ‘Indian Trusts Act’, aimed at providing greater autonomy and flexibility to trustees to invest funds of their trusts.

The Indian Trusts (Amendment) Bill, 2015 was introduced in the Lower House by Minister of State for Finance Jayant Sinha.

The bill seeks to amend certain sections (20 and 20A) of the Indian Trusts Act, 1882 to empower the Central Government to notify a class of securities, for the purpose of investing trust-money. It also does away with the requirement of <g data-gr-id="18">case</g> to case approval by the government of “any security”.

As per the ‘statement of objects and reasons’ of the proposed amendment, it also “provides to the trustees greater autonomy and flexibility” to take decisions on investment of <g data-gr-id="16">trust-money</g> based on their assessment of the risk-return <g data-gr-id="17">trade off</g> and the relevant provisions of the trust deed.

“It would be consistent with the current economic environment and the present shift from a merit based regulatory regime to a <g data-gr-id="15">disclosure based</g> regulatory regime”.