Gold Exchange Traded Fund Scheme (Gold ETFs)
Investment in Gold Deposit Scheme (GDS) of Banks
CIRCULAR, CIR/IMD/DF/04/2013 dated February 15, 2013
All
Mutual Funds/Asset Management Companies (AMCs)/ Trustee Companies/Boards of
Trustees of Mutual Funds/ All Depositories
1.
SEBI (Mutual Funds) Regulations, 1996, (MF Regulations) permits Gold Exchange
Traded Fund scheme (Gold ETFs) to invest primarily in:
a) Gold
b) Gold related instruments –
Regulation 2(mc) of MF Regulations stipulates that gold related instruments are
such instruments having gold as underlying, as are specified by SEBI from time to
time.
Please
also refer to SEBI circular no. SEBI/IMD/CIR No.4/58422/2006 dated January 24,
2006, issued in this regard.
2.
It has now been decided to designate Gold Deposit Scheme (GDS) of banks as one
such gold related instrument. Investment in GDS of banks by Gold ETFs of mutual
funds will be subject to following conditions:
a. The total Investment in GDS will
not exceed 20% of total asset under management of such schemes.
b. Before investing in GDS of banks,
mutual funds shall put in place a written policy with regard to investment in
GDS with due approval from the Board of the Asset Management Company and the
Trustees. The policy should have provision to make it necessary for the mutual
funds to obtain prior approval of their trustees for each investment proposal
in GDS of any Bank. The policy shall be reviewed by mutual funds, at least once
a year.
c. Gold certificates issued by Banks
in respect of investments made by Gold ETFs in GDS shall be held by the mutual
funds only in dematerialized form.
3.
This circular is issued in exercise of the powers conferred under Section 11
(1) of the Securities and Exchange Board of India Act 1992, read with the
provision of Regulation 77 of SEBI (Mutual Funds) Regulation, 1996 to protect
the interests of investors in securities and to promote the development of, and
to regulate the securities market.
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