EPFO may Allow Tweak in Equity Investments

EPFO may Allow Tweak in Equity Investments

Labour min likely to introduce proposal to hike contribution limit of 15%, risk-averse subscribers may be allowed to cut exposure

Employees’ Provident Fund Organisation (EPFO) subscribers may soon get the option to invest more of their retirement contribution in stocks to potentially earn higher returns, a senior labour ministry official said. The labour ministry is likely to introduce a proposal to increase the stipulated equity investment limit of 15% at the next central board of trustees (CBT) meeting on June 26. Any change in the norm will require the finance ministry to notify the new investment pattern. The EPFO has more than 50 million subscribers. The National Pension System (NPS) under the finance ministry gives subscribers the choice of investing as much as 75% in stocks.

At the same time, risk-averse EPFO subscribers may also get the option to reduce their equity contribution under the plans being considered, said the official. To be sure, raising the investment limit could see more funds going into Indian stocks, bolstering them at a time when they have been rattled by looming trade wars. CBT is the highest decisionmaking body of the EPFO and is chaired by the labour minister, currently Santosh Gangwar. It comprises representatives of trade unions, employers and central and state governments. The official told ET that the agenda for 222nd CBT meeting was still being finalised but the equity plan may be discussed.

“Considering that we have a unitisation policy for equity investments in place, which will be operational soon, we are now planning to move a step forward and give choice to our subscribers to either increase or decrease the investments in equity beyond the existing 15%,” the official said. CBT last year approved an accounting policy to credit units in lieu of investments in equities via exchange-traded funds (ETFs) into members’ accounts. Each EPF subscriber would then have two member account heads— fixed income and equity— with holdings reflected as units and returns being marked to market. It had also approved the recommendation of EPFO’s advisory body—the Finance Investment and Audit Committee—that subscribers be allocated equity units only for 15% of contributions. All units over and above this allocation to subscribers will be held by EPFO.

EPFO started investing in ETFs in August 2015. This amounted to 5% of investible deposits in FY16, rising to 10% in FY17 and 15% in FY18. It had invested Rs.41,967.51 crore in ETFs with a return of 17.23% as of February 2018. It had sold ETFs worth Rs.2,500 crore in March.

The Economic Times, New Delhi, 20th June 2018

Data storage norm splits digital payments industry

Data storage norm splits digital payments industry India’s nascent digital payment industry could be thrown into disarray due to the demand by the Reserve Bank of India (RBI) that all user data be stored within the country, fears an industry grouping, which has termed the decision as “heavy-handed”, even as others, including the country’s largest digital payment provider Paytm, have hailed the move. In a bid to narrow the growing schism, the industry is planning to send a formal representation to the regulator highlighting its concerns, a top official told ET. “We are trying to build a consensus on the issue," said the person adding that the representation to the central bank will be ready this week. RBI on April 6, mandated all payment companies—global and local—to set up data storage facilities within India by October. The stringent six-month deadline has attracted the ire of several sections of the industry that fear it will lead to a disruption of wel...

Offer’s for all of you

Great Bumper Dhamaka Offer’s for all of you... It's Time to see your Business Online, WebeCreator Offer Website Designing with domain & Email @ nominal charges. For a year For More information visit us http://goo.gl/KlpppF call on 9890151261/9773197533 drop a mail to sales@webecreator.com

Sebi to finalise options in commodities today

The Commodity Derivatives Advisory Committee of the Securities and Exchange Board of India ( Sebi) will meet on Friday with senior officials of the latter, to give a final shape to the rules on options trading in commodity futures, beside revising the warehousing norms to ensure good delivery on settlement. The decision taken, after discussing with the advisory committee, will be placed before the regulator’s board, to finalise the regulations. According to knowledgeable sources, three commodities in each segment, agricultural and non- agricultural, have been proposed for introducing options. It appears commodities from the soya and guar segments are preferred in the former. From the non- agri segment, it is likely that gold, silver and crude oil will be finalised. All these These have better liquidity and both the National Commodity and Derivatives Exchange and the Multi Commodity Exchange, respectively, will be able to introduce the options. In the equity segments, options ar...

CA Online

Search This Blog