India’s first silver ETF in the offing

Benchmark Asset Management plans to launch India’s first exchange-traded fund (ETF) tracking silver as part of a strategy to expand its bouquet of passively managed funds.

Sebi regulations restrict mutual funds from investing in commodities other than gold. But they can invest in global funds tracking any commodity, a path that Benchmark hopes to follow. The fund house filed initial papers with the Sebi to launch Silver Benchmark Exchange-Traded Scheme, which will invest at least 90 per cent of its assets in units of overseas mutual funds tracking silver.

In February, Benchmark sought the regulator’s nod to launch four fund of funds that would mainly invest in foreign exchange-traded funds (ETFs) tracking clean energy, private equity, commodities and water indices.

Deutsche Borse to sell BSE indices overseas

Germany’s Deutsche Börse (DB), which owns a 5 per cent equity stake in the Bombay Stock Exchange (BSE), has been made an exclusive worldwide sales partner for all indices of the Indian bourse. The move opens up prospective trading interest for the domestic indices in European and other Asian markets.

The BSE, which is Asia’s oldest stock exchange, is yet to attract investors’ fancy in derivatives trading in its indices, and the move is aimed to attract more investor interest in its indices, especially from among foreign investors.

At a later stage, this would also help the exchange in activating its derivative segment by luring foreign institutional investors (FIIs) to its products, said its officials. Already, Barclays has an ETF (exchange-traded fund) listed on the Singapore exchange (iShares Sensex), which tracks the BSE’s main index.

The BSE would also get to earn a licence fee from the users of its indices through the latest initiative, said senior officials.

Read more in The Business Standard article.

SEBI allows MFs to invest up to $4bn overseas

Market regulator SEBI has allowed mutual funds to invest up to four billion dollars in ADRs, GDRs, foreign securities and overseas exchange traded funds.

"Pursuant to the enhancement in overseas investment limits by RBI, it has now been decided that mutual funds can invest in ADRs, GDRs, foreign securities within overall limit of four billion dollars," the Securities and Exchange Board of India (SEBI) said in a circular.

The circular was issued following the announced by the Reserve Bank of India (RBI) in its annual credit policy.

The investment will be with a sub-ceiling for individual mutual funds. This should not exceed 10 per cent of the net assets managed by them as on March 31 of each relevant year, and subject to a maximum of 200 million dollars per mutual fund, it said.