Gold ETF Fund-Of-Funds Investment Curbs Are Temporary, SEBI Chair Pandey Says

Restrictions on fresh investments in gold exchange-traded fund (ETF) fund-of-funds schemes are temporary, Securities and Exchange Board of India Chairman Tuhin Kanta Pandey said on Wednesday, citing concerns around the balance of payments.

“I think these are temporary measures in view of some of those concerns that are happening around balance of payments,” Pandey said during a panel discussion at NDTV Profit Ignite in Mumbai.

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Asked whether SEBI planned to revise existing gold ETF schemes, Pandey said no changes were being considered at the moment. He did not give a timeline for lifting the restrictions.

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Several fund houses announced curbs on fresh investments from October 16. Depending on the scheme, the restrictions cover lump-sum investments, new systematic investment plans (SIPs), SIP top-ups and switch-ins. Some existing instalments are allowed to continue, while redemptions remain permitted under the terms set by individual fund houses.

Gold ETF fund-of-funds schemes invest in units of gold ETFs, giving investors exposure to gold through a mutual fund.

Pandey did not elaborate on the balance-of-payments concerns or specify what would need to change before the restrictions are lifted.

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