UTI Chairman P S Subramanyam declined to comment on the possibility of a reduction in the dividend for the current year. ``It's too early to comment on this issue,'' he said. A release issued on Tuesday night by UTI, however, said that the Trust will review the rate of return ``at the time of announcing the income distribution every year, having regard to the returns on comparative instruments during the previous 12 months.''

Subramanyam denied that there have been large scale redemptions in the scheme. ``Fresh inflows have increased by 30 per cent,'' he pointed out and added that ``there have been repurchasestoo.''

UTI, which began the restructuring of the beleagured scheme soon after the budget, has taken a number of steps that would set the stage for pricing the scheme based on its NAV. ``We have a three-year time-frame to switch to NAV-based pricing,'' said the UTI chairman. This will be done gradually, with a gradual increase in the spreads between sale and repurchase price to deter short-term investors.

UTI is evolving guidelines for strategic sale of US-64 equity holdings through a process of bidding. ``Negotiations and sale will be an on going process depending on market conditions and response of bidders,'' UTI said.

The Trust has decided to reduce the weight of equity in the scheme in favour debt instruments. With the transfer of PSU shares from the portfolio, the debt component has come down to 42 per cent. ``The AMC for US-64 has also approved a fund management strategy to rebalance the investment portfolio and gradually reduce the equity percetage by divesting shares with poor future prospects,strategic sales and by investing fresh inflows in debt.''

UTI has decided to bring its operations under Sebi regulation on an voluntary basis. The trust has already discontinued investment in term loans and deposits. ``The Trust is discussing with Sebi on an agreed framework for voluntarily coming fully under the jurisdiction of Sebi.''

In its effort to restructure the management of the scheme, UTI has inducted VV Desai, an eminent economist and Rajendra P Chitale, an eminent chartered accountant on its board of trustees. UTI has reconstituted the asset management committee for US-64 with seven members comprising five outside professionals and two senior officials of the Trust.

As recommended by the committee, UTI has created Chinese wall appointing separate and independent fund managers for various schemes. The number of fund managers and dealers have been raised from 24 to 42. The management of the US-64 scheme has been entrusted to an independent fund management group headed by an executivedirector.

UTI said with regard to the committee's recommendations on a detailed review of asset management processes, UTI is implementing a package for asset level and enterprise resource planning (ERP) package for liabilities side accounting.

It would be selecting professionals for undertaking business process re-engineering (BPR) assignment for investor service operations and in this connection holding discussions with Pricewaterhouse Coopers, Arthur Andersen and Mckinsey Consulting.

The BPR would be completed within a period of six months, UTI said adding that a comprehensive review as suggested by the committee would be commissioned after the BPR is complete.

UTI's new schemes are also being designed to attract retail investors. At present small investors account for over 99 per cent of the accounts while individual investors account for 61 per cent of US-64 capital.

Fund managers have been given final authority on responsibility and decision making while equity research analysts have beenvested with the responsibility for making recommendations. They have been also empowered to take range- bound buy/sell decisions based on the requirements of the scheme.