Press Information Bureau

Government of India

Ministry of Finance

17-August-2012 12:8 IST

Finance Minister P. Chidambaram Expresses Satisfaction Over SEBI Measures

The Union Finance Minister, Shri P. Chidambaram has noted with satisfaction the measures announced by the Securities and Exchange Board of India (SEBI). Following is the text of his statement:-

“It may be recalled that in my statement of August 6, 2012, I had said that “In the next few weeks, we will announce a number of decisions to attract more people to invest in mutual funds, insurance policies and other well-designed instruments.” In the context of that statement, Government welcomes the decisions taken by SEBI. These measures will stimulate financial savings among households as well as give a fillip to the mutual fund industry. More and more households should be encouraged to save in financial instruments rather than in gold.

Government has noted with satisfaction that the measures announced by SEBI yesterday have been widely welcomed by all the stakeholders.

There are a number of other suggestions which are under consideration by the Government. When Shri U K Sinha, Chairman, SEBI called on me on August 14, 2012, I had requested him to examine those suggestions independently and advise me. The examination by the Government and SEBI is likely to be completed in the next two weeks. I have requested Chairman, SEBI to schedule another meeting of the Board in early September when some more decisions can be taken on the suggestions that are under examination.

Government has also taken note of the recommendation of SEBI that the Rajiv Gandhi Equity Savings Scheme (RGESS) should also “provide for investments in equity schemes of mutual funds which have the securities allowed under RGESS as the underlying.” I have asked the Department of Economic Affairs, Capital Markets division, to examine the recommendation of SEBI and I expect that it would be possible to take a decision shortly.”

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DSM/RS/GN

Rajiv Gandhi Equity Savings Scheme expansion proposed to permit mutual fund equity schemes, subject to departmental examination. The Finance Minister welcomes SEBI measures to promote household investment in mutual funds and other financial instruments, encourages savings in financial instruments rather than gold, and notes stakeholder support. Additional suggestions are under Government and SEBI examination with a further Board meeting planned. SEBI recommends expanding the Rajiv Gandhi Equity Savings Scheme to permit mutual fund equity schemes holding allowed RGESS securities as underlying, and the Department of Economic Affairs has been asked to examine that recommendation for an early decision.