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Update for week ending October 23, 2007 |
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This has been a week of heady highs and terrible lows in the country's stock markets, thanks to the controversial participatory notes (PNs) that the regulators and the government are trying to moderate by asking that these instruments be phased out over 18 months or get them regulated by proper registration.
- Geojit Financial Services has launched online investing in mutual funds (MFs). The company has entered into an agreement with the SBI and Franklin Templeton Mutual Funds. The service will be available to all online customers of Geojit except non-resident Indians, in the first stage, said C. J. George, Managing Director and CEO of Geojit, here on Tuesday.
- A. P. Kurian, Chairman of the Association of Mutual Funds in India (AMFI), and Chairman of Geojit, said through the company’s trading portal that customers could purchase, redeem and switch mutual fund schemes. The new features also enable customers to do non-financial transactions such as updating registers/AMCs, changing of bank accounts, and changing of addresses.
- Benchmark Mutual Fund plans to launch Midcap Benchmark Exchange fund in three-four weeks. The open ended scheme, which will be listed on the exchange, would seek to offer returns close to that of CNX Midcap Index.
- The Insurance Regulatory and Development Authority of India (Irda) has observed that the proportion of unit-linked products has substantially gone up in the overall portfolio of insurance companies.
- In its actuarial evaluation report for 2007, the Irda has observed that the proportion of unit-linked insurance plans (Ulips) in the total product portfolio has gone up by 65-70 per cent, which ties the fortunes of the insurance company and its investors to the vagaries of the stock market
- The regulator is in the process of modifying the guidelines for Ulips so that products with high concentration of investments will be treated as mutual funds and term products if the proportion is tilted towards a greater risk.
- The review is aimed at bringing in better information, transparency standards and understanding of such products among customers. Customers should have an idea as to what the risk and the return in the policy are when they subscribe to them,
- A section of asset management companies is learnt to have approached the Securities and Exchange Board of India, seeking changes in the existing distribution fee structure in line with some of the advanced markets. The proposal, coming on the heels of the Sebi’s plan to waive the entry-load, involves introduction of variable fee for the distributor’s services to an investor. The proposed model, which is similar to the structure prevalent in the stock-broking industry, allows distributors to add value to its services to clients, without impacting the net asset value (NAV).
- In August, the market regulator had proposed that investors who approach the mutual funds directly, rather than the existing practice of routing their investments through distributors, should not be charged the entry load of 2.25% for equity funds. Entry load is the commission a mutual fund charges an investor to meet its expenses in selling a scheme. The proposal, if implemented, is expected to boost investor returns.
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