IRDAI approves debt ETFS

The IRDAI has recently given nod to the investment in debt exchange traded funds (ETFs). “The IRDAI permits debt ETFs with underlying debt securities of Central Public Sector Enterprises, proposed to be launched in India, as an eligible class of investment as part of Mutual Fund exposure,” said SN Jayasimhan, General Manager, Investments, IRDAI. In accordance with the guidelines brought in by the regulator, MFs registered with SEBI and governed by the market regulator should issue the debt ETFs. The debt ETF should invest in a basket of securities issued by CPSEs. “The minimum investment by the insurer should not be less than creation unit size, and shall not be reduced to below creation unit size,” it said. The general rating criteria will be in line with the extant investment norms of the insurance regulators.