EPFO Might Credit ETF Units To Subscriber's PF Accounts

| October 22 , 2017 , 18:22 IST

ETF investors are in for a surprise as the retirement fund body, EPFO is considering to credit the subscribers' share of ETF investments to their provident fund accounts, which could later be redeemed at the time of withdrawal.

While talking to a leading news agency, a Labour Ministry official said, "Employees' Provident Fund Organisation's (EPFO) apex decision-making body the Central Board of Trustee (CBT) headed by Labour Minister Santosh Gangwar will meet in November. They are likely to consider the proposal to credit ETF investments to members' accounts."

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The proposal which was one of the agendas discussed in an earlier CBT meeting might be brought up during the next month meet. The issue was referred to Comptroller and Auditor General (CAG), following which he agreed to propose the plan after seeking some clarifications in the matter.

Figures suggest that by end of the ongoing fiscal year, the EPFO's investment in ETFs might touch Rs. 45,000 crore. The body raised the investing percentage in Exchange Traded Funds this year from 5% to 15%. EPFO started putting its investible deposits in stock linked products in August 2015.

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If the proposal got approved, the ETF units will be credited to the subscribers' accounts on behalf of their shares. An ETF is a security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange which EPFO manages a corpus of over Rs. 10 lakh crore having over 5 crore subscribers.