A dozen fund houses ready to launch RGESS plans

Comments 0
SummaryWith IDBI MF getting the capital market regulatorís nod for its series 1 RGESS scheme on Monday, about a dozen fund houses will be ready to launch their Rajiv Gandhi Equity Savings Scheme plans by February 9, the day finance minister P Chidambaram officially launches the product.

With IDBI MF getting the capital market regulatorís nod for its series 1 RGESS scheme on Monday, about a dozen fund houses will be ready to launch their Rajiv Gandhi Equity Savings Scheme (RGESS) plans by February 9, the day finance minister P Chidambaram officially launches the product.

Besides IDBI MF, LIC Nomura MF and DSP BlackRock have got Sebi nod for launching their closed-ended RGESS-compliant schemes. Birla Sun Life RGESS, UTI RGESS, and SBI RGESS Tax Saving Fund are still waiting for Sebi approval.

According to industry observers, the number of fund houses that could have launched schemes under the RGESS ambit would have been much higher had it not been for the delay in the final notification for the scheme. Sebi had issued clarifications on RGESS notification as late as December 6 and the regulator typically takes about three-weeks-to-a-month to clear new schemes.

Most fund houses, however, have bought their existing ETFs schemes under the RGESS ambit. Fund houses like ICICI Prudential MF, Goldman Sachs, Motilal Oswal, Reliance MF, Kotak MF, Religare MF, SBI MF and Quantum MF will offer RGESS plans through the ETF route.

According to experts, ETFs as a product are easy to understand and are cost-efficient as the AMC does not charge distributor brokerage, which is why several AMCs have taken the ETF route for offering RGESS plans.

ďI think fund houses have been quick to bring in schemes compliant under RGESS. Considering that the clarifications on the notifications were issued less than two months ago, it is laudable that a good number of fund houses have been able to get the necessary approvals from the AMC and trustee, prepare offer documents, tweak existing products and filing offer documents for new schemes,Ē said Himanshu Pandya, VP & head, products, ICICI Prudential Asset Management.

Under the RGESS route, a new retail investor who has not transacted in equity share through his depository account as on November 23, 2012, and having a gross annual income not exceeding R10 lakh, would be eligible for tax savings under Section 80 CCG, which is over and above the R1 lakh limit available under Section 80 C of Income tax Act.

Market participants believe it is too early to gauge the kind of response the scheme will get, but a lot will depend on how individual fund houses work with distributors to sell the scheme.

That RGESS has a

Single Page Format
Ads by Google

More from Corporates & Markets

Reader´s Comments
| Post a Comment
Please Wait while comments are loading...