New Delhi: After two private fund managers, ICICI Prudential and HSBC Asset Management Company (AMC), emerged as front-runners to manage Rs 25,000-crore incremental deposits of Employees Provident Fund, a final decision on their fate will be taken on Tuesday by the apex decision-making body on the matter — the EPFO’s Central Board of Trustees.
The Board, chaired by labour and employment minister Oscar Fernandes, will meet on Tuesday to take a final call on recommendations of the EPFO’s Finance and Investment Committee. The committee, in its meeting held last week, had given nod to the pruned list of two private fund managers and a public fund manager, State Bank of India from among the seven private and three public fund managers that had qualified technical bids.
Meanwhile, legal opinion on eligibility of Asset Management Companies or other financial institutions in addition to banks as portfolio managers was sought from the labour and employment ministry. The opinion, which contained certain ambiguity, however, was put aside by Central Provident Fund Commissioner, A Viswanathan, stating that management and deposits or investment of EPFO funds are two different activities. Therefore, portfolio management by AMCs can be made as long as they channelized these investments in the name of the CBT and EPFO within specified guidelines.
However, the proposal is likely to be debated hotly within the board, with employees’ representatives, comprising of leading trade union organisations, opposed to private participation in the fund management.
Earlier, independent consultant, Crisil had been appointed by a three-member committee to assist EPFO in selection of multiple fund managers. Crisil has also been given the mandate to establish an Investment Monitoring Cell and help authorities in monitoring the performance of chosen fund managers for a specified period. Later, EPFO would be expected to build in-house competence for monitoring these fund managers’ performance.
The Board, chaired by labour and employment minister Oscar Fernandes, will meet on Tuesday to take a final call on recommendations of the EPFO’s Finance and Investment Committee. The committee, in its meeting held last week, had given nod to the pruned list of two private fund managers and a public fund manager, State Bank of India from among the seven private and three public fund managers that had qualified technical bids.
Meanwhile, legal opinion on eligibility of Asset Management Companies or other financial institutions in addition to banks as portfolio managers was sought from the labour and employment ministry. The opinion, which contained certain ambiguity, however, was put aside by Central Provident Fund Commissioner, A Viswanathan, stating that management and deposits or investment of EPFO funds are two different activities. Therefore, portfolio management by AMCs can be made as long as they channelized these investments in the name of the CBT and EPFO within specified guidelines.
However, the proposal is likely to be debated hotly within the board, with employees’ representatives, comprising of leading trade union organisations, opposed to private participation in the fund management.
Earlier, independent consultant, Crisil had been appointed by a three-member committee to assist EPFO in selection of multiple fund managers. Crisil has also been given the mandate to establish an Investment Monitoring Cell and help authorities in monitoring the performance of chosen fund managers for a specified period. Later, EPFO would be expected to build in-house competence for monitoring these fund managers’ performance.
Source: The Indian Express
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