First China, now India.
ASHISH GUPTA
TIMES NEWS NETWORK[ FRIDAY, FEBRUARY 17, 2006 12:22:33 AM]
Gold mutual funds may soon be a reality in India. Securities and Exchange Board of India (SEBI) has cleared the way for introducing gold exchange traded funds (ETF) in the country.
It has approved two models for launching the product – a mutual fund custodian bank integrated model and mutual fund warehouse receipt model. These two models were earlier recommended by a SEBI-appointed committee.
Under the mutual fund custodian bank integrated model, the physical gold will be held by a custodian bank on behalf of the mutual fund. The mutual fund sells or buys units to a wholesale intermediary based on the value of the gold with the custodian bank. These units will then be traded on stock exchanges and retail investors could buy them from the wholesale intermediary.
As against this, in case of the mutual fund warehouse receipt model, gold warehouse receipts are held by a custodian bank on behalf of the mutual fund. The mutual fund sells or buys units to a wholesale intermediary based on the value of the gold warehouse receipts with the custodian bank.
Read more @ Source: India times
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