INSURANCE
IRDAI allows insurers to invest in debt ETFs of CPSEs
Dec-12-2019

The Insurance regulator, the Insurance Regulatory and Development Authority of India (IRDAI) has allowed insurers to invest in debt ETFs (exchange traded funds) with underlying debt securities of Central Public Sector Enterprises (CPSEs). According to guidelines for such investments, the regulator said debt ETFs with underlying debt securities of CPSEs were being permitted as an eligible class of investment. IRDAI’s guidelines allow insurers to invest in various exhaustive asset categories. Such debt ETFs are proposed to be launched in India.

IRDAI said such debt ETFs should be issued by mutual funds registered by SEBI and governed by its regulations. The debt ETF shall invest in a basket of securities issued by CPSEs which are part of constituents of a publicly available index. The minimum investment by the insurer shall not be less than creation unit size and it shall not be reduced to below creation unit size.

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