Delhi: The government has allowed all non-government
provident funds, superannuation funds and gratuity funds
to invest in equity markets.
per the revised guidelines released yesterday on the
investment pattern to be followed, these funds can now
invest up to five per cent of their total portfolio
in shares of companies that have an investment grade
debt rating from at least two credit rating agencies.
new guidelines would come into effect from the beginning
of the 2005-06 financial year. This would mean that
the Central Board of Trustees (CBT) of the Employees
Provident Fund Organisation (EPFO), which is the largest
PF fund in the country managing close to around Rs1
lakh crore of workers'' money can now take a decision
to invest in corporate equities.
funds have also been permitted to invest in Term Deposit
Receipts (TDRs) of the public sector banks up to three
years as against the existing limit of less than a year.
new guidelines further allows these funds to invest
in the bonds of the public financial institutions and
public sector companies if these are rated as investment
grade by two credit rating agencies.
It has also been decided to allow investment in ''collateral
borrowing and lending obligations'' (CBLO) issued by
Clearing Corporation of India Limited and approved by
the Reserve Bank of India. It further allows an investment
of up to 10 per cent in the debt instruments bearing
investment grade rating and or equity-linked scheme
of mutual funds regulated by SEBI. The maximum exposure
of any fund to investment in any gilt fund has been
restricted to 5 per cent of its portfolio at any point