SEBI Allows Non-Bank Custodians to Manage Gold ETFs

SEATTLE (Scrap Monster): The Securities and Exchange Board of India (SEBI)- the regulator for the securities market in India announced new amendment in Mutual Funds regulations.

According to the revised norms published by SEBI, non-banking custodians would also be allowed to manage gold ETFs and other gold-related products. Earlier, the assets of the scheme were allowed to be kept in the custody of a custodian bank registered with the Board. To this effect, SEBI has introduced amendment to Regulation 26 of the SEBI (Mutual Funds) Regulations, 1996, following approval of the proposal by SEBI’s board in its February meeting.

Also, SEBI announced amendment to Regulation 28 (4) that the sponsor or asset management company shall invest fifty lakh rupees or not less than one percent of the amount which would be raised in the new fund offer, whichever is less and such investment shall not be redeemed until the winding up of the scheme. As per the amendment, this investment shall now be specified by the Board.

The amendments have come into force with effect from March 6, 2020, said SEBI press release.