Commodities mutual fund: Where’s the hold-up and what’s causing the delay?
The reason behind that no one wants to take up the role of commodity custodian because there is no one ready to take responsibility for the goods lying in the warehouse of the custodian. This is one of the reasons said by an industry official.
In the Month of May. The Securities and Exchange Board of India (SEBI) had approved their participation in the commodity segment. After a long consultation with the mutual fund industry. Any way Not a single asset management company being launched a mutual fund so far. Due to the delay in the approval of the custodian license.
With Deutsche bank filling for a custodian license in the commodities space things seem to be looking up.
According to the information said by a source. The reason behind the delay was for the commodity segment SEBIs investment management department requires separate registration to be a custodian.
However, further digging reveals that this is just the tip of the problem.
In the present, situation goods that come under the warehouse development and regulatory authority were only the agricultural commodities stored in the warehouse. But the only reason that is making the interested parties uncomfortable as there is no regulation for the Non-Agri segment.
Firstly the SEBIs investment management department is insisting on a custodian. Where the mutual fund industry wants to start funds in this segment said a source.
A long back of three years when it opened investment in alternative investment funds there is a great increase in the market depth. So now the commodity market was hoping the same increase in market depth. By participating with the institutional investors, which includes mutual funds and portfolio management service, providers.