The Securities and Exchange Board of India is likely to clear the long pending application of Taurus Parsoli Ethical Fund to launch a Shariah fund by the end of this month. A go-ahead to Taurus would pave the way for other mutual fund houses to launch similar funds.
Four weeks ago, the fund house was asked to re-submit its offer document. And, now the proposed fund has been made open ended as opposed to its earlier close-ended structure.
Taurus had filed the offer document for this fund in October 2007 in collaboration with Parsoli Corporation. However, the regulator then had some reservations on its Islamic nature. Considering that Sebi has been very fast in clearing offer documents, the time taken for approval in case of Taurus has been pretty lengthy.
It is being said that the regulator was not happy with its religious connotation and the matter was referred to the Ministry of Finance. "Some administrative clearances were needed The regulator is taking its own time and we expect to get the approval very soon," said R.K Gupta, managing director, Taurus Asset Management.
Four years ago, Benchmark mutual fund had filed for a Shariah-based exchange-traded fund but it could not get approval. Once again Benchmark has filed for the same. The approval could come faster now that a similar fund (that of Taurus) is about to be cleared.