Move to resolve ULIP row is on, says Sebi chief

Asserts there will be no new plans

“We want to do it (move appropriate court) quickly,” Chairman C B Bhave said on the sidelines of a CII Conference on Indian Financial Markets on when it would move the court for resolving the jurisdiction issue.

He also told foreign institutional investors apprehensive about the turf war between the two regulators that they can continue to invest in current ULIPs, which have a portfolio of over Rs 92,000 crore.

Sebi’s  latest direction is against floating any new product, he clarified. “FIIs should know what the correct position is and the correct position is that investors can continue to invest in current ULIPs and no new ULIPs are allowed,” Bhave said. Sebi had last week said that all ULIPs issued after April 9 will have to have its approval. This was questioned by insurance sector regulator.

On Thursday, the market watchdog had moved the Supreme Court and some High Courts to guard against any ex-parte decision.

On April 10, Sebi had banned 14 life insurance companies, including those belonging to Tatas, SBI, ICICI, HDFC and Reliance Anil Ambani group, from raising funds through ULIP without its approval. Later on April 14, Sebi came out with second order that exempted existing ULIP schemes of these 14 players from the ban.

Currency option on the cards

Sebi Chairman C B Bhave, on Friday, said they are planning to introduce more currency derivatives products, beginning with options, to give a wider choice to investors.
“We will look into other kinds of derivatives (in currency trading), options to begin with, in order to offer increased products that are available,” Bhave said.

Currency option is a derivative instrument which gives the owner the right, but not the obligation, to exchange money denominated in one currency into another currency at a pre-agreed exchange rate on a specified date.