The mutual fund industry is awaiting guidelines from markets regulator Sebi on the implementation of the Rajiv Gandhi Equity Savings Scheme (RGESS) as they need more clarity on the details of investment.
"We are waiting more clarity on the requirements of demat accounts, determination of first-time investors among others, which need to be clarified by the Sebi," IDBI MF managing director and chief executive Debasish Mallick told PTI.
On Friday, Finance Minister P Chidambaram issued a notification outlining some of the nuances of the RGESS, which seeks to deepen the secondary market by bringing in first-time investors into the system.
The scheme, proposed in the Budget, provides a 50 per cent income tax benefit for first-time capital market investors whose annual income is below Rs 10 lakh, on an investment up to Rs 50,000.
Though RGESS aims to increase direct equity investment culture in the country, the Finance Minister has also allowed investments through ETFs (exchange traded funds) and mutual funds with an underlying portfolio investing in top-100 listed stocks like BSE-100 and CNX 100 apart from top PSUs.
"The issue of 'which kind of fund' has already been clarified with the provision for a BSE 100 or CNX 100 kind of products. As we have an active CNX 100 fund, we are eager to participate in the RGESS," Mallick said.
Quantum Asset Management Company chief executive Jimmy A Patel said issues like demat accounts would be one major challenge while getting this scheme running.
"The biggest challenge is to identify an investor who has a demat account and have not made any investments in equities so far," Patel said.
He, however, added that the scheme will help in increasing penetration in tier-II cities.
Another industry official said more clarity is necessary with regard to underlying portfolio of RGESS eligible securities with listing requirement.
First Published On : Sep 23, 2012 15:00 IST