Franklin Templeton Investments, which has bought out Pioneer ITI Asset Management Company, plans to approach the Central Board of Direct Taxes (CBDT) to resolve the issue of operating two equity-linked savings schemes (ELSS).
The merger of the two fund houses has left Templeton with two ELSS. According to the CBDT, a single fund house cannot have two ELSS running concurrently. Rajiv Vij, regional head for India, Middle East and Eastern Europe, said they will initiate a dialogue with the regulators once the lock-in period on the schemes expires.
One of the alternatives is to wind up the scheme, which would mean giving investors an exit option. A merger, which is not allowed under current regulations, might also be explored in talks with the regulators.
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The merger, which become effective from August 31, 2002, leaves the combined entity with Rs 8,200 crore of assets and an investor base close to 9 lakh as of August 16.
Ideas have been generated on the merger of schemes which overlap. For instance there is not much to differentiate the cash and liquid funds and a merger will help. The gilt funds could be merged and the range of plans enhanced from the current Templeton Government Securities Fund by adding an investment and provident fund plans.
On the equity side, the intention is to merge Franklin India Growth Fund with Pioneer