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Talks on to bring US-64 under Sebi purview

Janaki Krishnan

The Unit Trust of India has commenced discussions with the Securities and Exchange Board of India on the modalities to bring its flagship US-64 scheme under the market regulator's purview.

On Thursday, UTI's acting chairman K G Vassal and other top brass met Sebi chairman D R Mehta in the afternoon to have a preliminary discussion. While UTI officials dismissed the meeting as a "courtesy visit", sources said the two had initiated talks on bringing the scheme under Sebi guideline. "It was in the nature of an ice-breaker for a long-term association between the two entities," the sources said.

Sebi had earlier said that since it does not regulate UTI, it had nothing to do with the mutual fund's activities and was in no position to monitor its transactions. Most of the schemes of UTI, except US-64, are regulated by Sebi.

However, unlike other mutual funds, which are regulated by the securities watchdog, UTI is not functioning as per the Sebi norms. Discussions were also held on the second edition of the Monthly Income Plan, which has not yet been cleared by Sebi, the sources said.

They said there might be a move to bring UTI under Sebi. The discussions also considered this possibility and what UTI could do in this direction, they said. It is also said that if UTI had been brought under Sebi earlier, it would not have landed on such a mess.

A Sebi official said: "UTI is not accountable to anyone. Decisions regarding its actions and transactions are taken independently. Even the government is not aware about what is happening within the organisation."

There are no government nominees on UTI's board of trustees and even after the 1998 crisis it was not felt necessary to appoint one.

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