The Finance Ministry has invited applications to engage an asset management company (AMC) to create the new ETF.
The finance ministry invites "request for proposals (RFPs) to engage an asset management company for creation and launch of a new Exchange Traded Fund(ETF) comprising shares of listed CPSEs and other corporate entities", an advertisement said.
The government is planning to create a new ETF, in addition to the existing CPSE ETF that was launched in March 2014.
The proposed ETF could be a new fund offer (NFO) followed by further fund offer (FFO)/tap mechanism/tranche or in other additional offering.
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The Department of Investment and Public Asset Management (DIPAM) under the Finance Ministry will select and appoint one AMC with experience and expertise in launch and management of equity mutual fund or ETF schemes.
Sebi-registered mutual funds or asset management companies with at least 5 years of experience of fund management, domestically or globally, either on their own or through sister concerns or consortium partners would be eligible to place their bids.
Also, the eligible applications should have more than Rs 2,500 crore as average equity or ETF assets under management as of April-June 2016 quarter, the ministry said.
The government is in the process of selling its stake in central public sector enterprises (CPSEs) through strategic divestment.
Earlier in July, NITI Aayog Vice-Chairman Arvind Panagariya had said the government may go ahead with strategic divestment in public sector units in the next six months.