Retail Mutual Funds Warm Up to GIFT City After Tax Clarity

Asset managers have started showing interest in launching schemes for retail investors in GIFT City after the government provided tax clarity.

- Srushti Vaidya

DSP Mutual Fund has already launched its first retail scheme from the international financial centre. Now, subsidiaries of PPFAS Mutual Fund and NJ Mutual Fund have applied to launch retail-focused schemes in GIFT City, said three people in the know.

"For NJ, the fund management entity (FME) as well as the fund have been approved by the regulator," said one of the people quoted earlier, speaking on the condition of anonymity. While the FME is approved for PPFAS, it still hasn't filed to launch a fund with the regulator, the person added.

In GIFT City, an FME is a fund manager and a retail scheme is similar to a mutual fund plan. The International Financial Services Centres Authority (IFSCA) is the regulator for this jurisdiction. Queries emailed to PPFAS and NJ Mutual Fund remained unanswered until press time.

GIFT City allows financial services to non-residents and residents, including institutions and retail investors, in foreign currency. So far, most funds launched there have been non-retail products such as Category III Alternative Investment Funds. This category, which includes hedge funds and long-only funds, has 166 schemes in GIFT City.