Regulatory framework in place for Exchange Traded Funds

In a major breakthrough to capital market development, the recent gazette notification on new Unit Trust Code 2011 has introduced the regulatory framework for Exchange Traded Funds (ETFs).

The Securities and Exchange Commission (SEC) has been keen to pave the way for ETFs and as a precursor to new regulations, received technical inputs from Securities and Exchange Board of India.

The capital markets has been bracing for ETFs whilst EAP Group-linked Swarnamahal Financial Services had gone public that it was keen to launch a gold ETF.

ETFs are an integral part of the capital and financial markets, offering wider options for investors in diversifying the management of their funds as well as risks.