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UN Pension Fund Gets FII Status
The Telegraph
August 22, 2004
The Securities and Exchange Board of India has granted registration to United Nations Joint Staff Pension Fund (UNJSPF) to operate as a foreign institutional investor (FII) in the country.
"On the last working day of the week, United Nations Joint Staff Pension Fund has been assigned the status of an FII," Sebi chairman G. . Bajpai said while addressing an investor camp here today.
Just a month back, California Public Employees' Retirement System (Calpers) chose India as the preferred investment destination over China and was registered as an FII on July 15. Calpers is the largest public pension fund of the United States.
According to Sebi executive director S. C. Das, the capital market watchdog has waived the registration fees for UNJSPF. In recent times, many foreign funds have expressed interest to invest in India, Das said.
As on December 31, 2003, UNJSPF had assets over $26 billion, of which around 60 per cent were invested in equities. The assets were invested in 46 countries, including the emerging markets. A currency-wise breakup shows that 47.8 per cent of the investments were in dollars, 23.4 per cent in euros and 52.2 per cent in 25 other currencies.
Although the assets managed by UNJSPF are much less compared with the $166 billion managed by Calpers, it does indicate the faith that FIIs have in the domestic market.
This indicates the increasing interest that the Indian capital market has generated among foreign investors, Bajpai said. It is a result of the broad-based developments in the asset market coupled with factors such as shorter settlement cycle of T+2, advanced risk management mechanism and improved corporate governance. It is apparent from the way the market recovered from both the May 14 and May 17 bloodbath, Bajpai added.
"Indian securities market has been able to minimise all three risks namely operational, systematic and structural risks," Bajpai said. He added that the investors have recognised the high profitability potential of placing Indian equities in global holding.
According to Bajpai, the derivatives market provides investors the option to hedge their risks in the capital market. "An investor who has the appetite for a 25 per cent fall in investment can hedge his risk in the derivatives market," Bajpai said.
T+1 settlement
The Sebi chairman said the proposal for introduction of T+1 settlement on the bourses is on schedule.
Everything is ready on the securities side for the introduction of T+1 settlement, but there is some delay on the cash side, which would be settled soon," Bajpai said while addressing a seminar later in the day.
"I am more concerned about real time gross settlement (RTGS). Unless there is a fund flow coming in, T+1 cannot succeed," he said.
Bajpai said he was in touch with the Reserve Bank of India and was studying the progress in this direction.
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