Sebi may refer new UTI Global Titans to panel

The Securities and Exchange Board of India (Sebi) is likely to ask the High Level Capital Markets Commitee to take a call on the UTI-SSgA-Global Titans Index Fund, a new scheme by the UTI Mutual Fund.

According to the prospectus filed with Sebi, the fund proposes to invest in stocks comprising the Dow Jones Global Titans 50 Index.

However, some of these companies do not have any investment in any Indian company. Under current regulations, such investments stipulate that the companies invested in should have a minimum 10 per cent stake in any Indian listed firm.

Sebi officials said the matter would be referred to the high level panel "since the final decision is up to the Reserve Bank of India".

UTIMF officials said they were in talks with Sebi on the issue. The prospectus of the equity-oriented scheme was filed a couple of weeks back.

Ashutosh Bishnoi, chief of marketing, UTIMF, said, "We are in no hurry since we know that it would take some major policy changes. It is an experimental offering from us."

Among the major names in the Dow Jones index are General Electric, Exxon Mobil Corp, Microsoft Corp, Citigroup, BP PLC, Intel Corp, Bank of America Corporation, Vodafone Group PLC, Johnson & Johnson, American International Group Inc, HSBC Holdings PLC, IBM Corp, Cisco Systems Inc, Wal-Mart Stores Inc, Procter & Gamble Co, among others.

Companies in the list such as GE, Microsoft, Vodafone, Intel, IBM do not fulfil the basic criteria under which such investments can be made. The prospectus says: "The Dow Jones Global Titans 50 Index presents an opportunity for money managers to create investible products based on these internationally based, globally oriented companies that investors know and trust."