Sebi allows mutual fund houses to launch passive ELSS
SEBI has modified the “Categorization and Rationalization of Mutual Fund Schemes” to allow fund houses to launch passive equity linked saving schemes. Investors can now invest in passive tax saving scheme schemes to save taxes under Section 80C of the Income Tax Act.
In a circular released, Sebi has said that mutual funds can launch either of the following ELSS schemes in the open ended scheme category, subject to compliance with guidelines on Equity Linked Saving Scheme, 2005 notified by the Ministry of Finance.
The fund houses can either launch an active ELSS Scheme or a passive ELSS scheme (through Index Fund). The passive ELSS scheme shall be based on one of the indices comprising equity shares from top 250 companies in terms of market capitalization.
“I think it is a good move. Always good to add options for investors. It also shows the keenness of the regulator to promote passive amongst investors across categories. I hope in the future they allow AMCs to have both passive as well as active ELSS and leave the choice to the investor,” says Swarup Mohanty, CEO, Mirae Asset Mutual Fund.
