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Irda permits insurers to invest in equity ETFs

ETF is a security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange.

New Delhi | Published: March 4, 2014 1:23:32 am

Irda on Monday allowed insurance companies to invest in equity exchange traded funds (ETFs) with certain conditions, a move which would help boost inflows into the country’s stock markets.

Only passively managed schemes of the mutual funds which are registered with Sebi and governed by Sebi are eligible, Irda said in a notification.

ETF is a security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange.

“These schemes are benchmarked and tracked to publicly available index,” it said, adding, these instruments would be listed on at least one exchange which is having connectivity with nationwide terminals.

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