Foreign investors could invest up to $10 billion in mutual funds: Finance minister

NEW DELHI: The government on Monday said that foreign investors, other than FIIs, would be allowed to invest up to $10 billion in domestic mutual funds, a move that will help in moderating volatility in the capital market.

This class of investors called Qualified Foreign Investors (QFIs), but not Foreign Institutional Investors (FIIs), can invest money into domestic mutual funds through Unit Confirmation Receipts (DPs) or Depository Participant route, Joint Secretary (capital markets) in the finance ministry, Thomas Mathew , said.

QFIs could be individuals and bodies, including pension funds, and cumulatively they can invest up to $10 billion (about Rs 45,000 crore).

At present, only FIIs, sub-accounts registered with the market regulator SEBI and NRIs are allowed to invest in mutual fund schemes in the country.

To begin with, $10 billion is the total ceiling on QFI investment in India but it is subject to review depending on response, he said.

"SEBI will be the regulator for all investments for both routes," he said, adding the SEBI will issue necessary notification and framework by August 1.

Only KYC (know-your-customer) compliant retail foreign investors would be allowed to invest and the DPs will ensure proper KYC of QFIs as per the norms prescribed by SEBI, he said.

Besides, mutual funds would also undertake KYC of QFIs, he added.

He further said that one QFI can open one account in one of the qualified DPs and only QFIs from jurisdictions which are FATF (Financial Action Task Force) compliant would be eligible to invest in the MFs under the scheme.

The move follows the announcement of finance minister Pranab Mukherjee on the issue in the last Budget.

"Currently, only FIIs and the sub-account registered with the SEBI and NRIs are allowed to invest in the mutual fund schemes. To liberalise the portfolio investment route it has been decided to permit SEBI registered mutual funds to accept subscriptions from foreign investors who meet the KYC requirements for equity schemes," Mukherjee had said in the Budget speech.

"This would enable Indian mutual funds to have direct access to foreign investors and widen the class of foreign investors in India equity market," the finance minister had said.

The average assets managed by the MF industry, consisting of 40 players, stood at Rs 7,00,538 crore as of March 31, 2011.

Since it is going to be retail investment, it would be more stable than the FII money, Mathew said.

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Religare Capital Markets Appoints Head of Institutional Equities, India

New Delhi: Religare Capital Markets Ltd (RCML), the investment banking and institutional securities arm of Religare Enterprises Ltd (REL), has announced the appointment of Gautam Trivedi as MD and head of institutional equities, India.Gautam joins RCML with over seventeen years of financial services experience, most recently at Goldman Sachs, where he worked for seven years, latterly as MD and head of sales in India.

He was also a member of the Board of Directors of Goldman Sachs India Pvt Ltd. Previously, he served as executive director, Asian equity sales in Hong Kong. Prior to Goldman Sachs, he was vice president, corporate finance, for Reliance Industries Ltd in Mumbai.Gautam began his career as a research analyst at DSP Merrill Lynch Ltd and went on to work in senior roles at CLSA and Jardine Fleming Hong Kong.


He has an MBA from the University of Southern California and a Bachelor of Law and Commerce from the University of Bombay.Gautam, who will be based in Mumbai, is the latest in a series of high profile hires at Religare Capital Markets Ltd who, along with the global management team, will lead the growth of the firm's institutional securities business.

RCML is now present across rising markets and has some 300 staff, counting over 40 analysts covering a broad range of industry sectors, speculation themes and macro-economics.Tarun Kataria, chief executive officer, Religare Capital Markets India, said, "We are delighted to welcome Gautam to the team as head of institutional equities for India. We are confident that he will provide the leadership required to drive our rapidly growing institutional equities business."

Anglo-Irish Bank Chief Executive Drumm Corrects Bankruptcy Errors

OLD Anglo-Irish Bank chief executive David Drumm said information about a new lawsuit filed against him by former shareholders of the bank and discounts totaling approximately € 1,000,000 described accounts or jointly with his wife in his accounts or language, according to a new bankruptcy archiving in Boston.

Mr. Drumm, who filed for bankruptcy in October, corrected several errors and omissions - many of which relate to transfers of money to his wife - in their financial situation in the filing with the Bankruptcy Court for the District Massachusetts yesterday. The errors were described as "accidental" on his part.
The new statement of affairs, which adds considerable detail to the document filed last October, says Mr Drumm, who resigned as chief executive of the bank in December 2008, faces a potential legal claim from former Anglo shareholders Jayne Mollard, Brian Doyle, Belinda Ennis, Michael J Curley and Anne Marie Kidney.

Shareholders saw their investment wiped out when Anglo was nationalised in January 2009.

Mr Drumm also states that he made 12 transfers of cash from his personal account or the account of his business, Harborlight (since renamed Delta Corporate Finance), to a bank account he shared with his wife, Lorraine. These transfers were made between November 6th, 2009 and September 27th, 2010.

A further 13 transfers were made from Mr Drumm's accounts at Anglo and AIB or from the proceeds of the sale of his assets to his wife between October 20th, 2008 and September 28th, 2009.
The largest transfer was €372,561, which was moved from a shared account at AIB in the names of Mr Drumm and his wife to another account belonging to his wife at the same bank on December 15th, 2008 - four days before Mr Drumm resigned from the bank.

He transferred €180,000 from their joint AIB account to his wife's account at the bank three days earlier. On the same day, the proceeds from a €250,000 mortgage on a property in Skerries, Co Dublin was transferred to her AIB account, according to the filing.

On March 11th, 2008 Mr Drumm transferred €80,000 and €50,000 in two transactions - the first from a joint account at AIB to his wife's AIB account and the second from Mr Drumm's Anglo account to an account at the bank belonging to his wife.

After leaving the bank, including Mr. Drumm transferred proceeds of € 46k on the sale of its cars. Mr. Drumm has also transferred $ 100,000 from their joint account to account for his wife on 12 June 2009 AIB. “It occurred to me [me], she did not know where the money was, so she took a lot more money, Drumm said in evidence.