NEW DELHI, SEPT 28: Mutual fund behemoth Unit Trust of India (UTI), which has approached the Securities and Exchange Board of India (SEBI) to inspect some of its schemes, has not yet brought the Unit Scheme-64 under the SEBI purview so far.UTI has approached the SEBI with a concrete proposal to inspect its schemes for the first time this year after the controversy on its flagship scheme US-64 last year. The government had earlier this year announced a bail-out package for the US-64 scheme.The trust has since completed the revamp of the scheme shuffling 80 per cent of the corpus into 50 top performing scrips. The trust has started managing 26 scrips of PSU companies against which bonds were issued to it. ``If this is the case, why is the UTI delaying a decision on bringing US-64 under the SEBI?'' said a fund manager."We have received a concrete proposal from UTI asking us to inspect some of its schemes," SEBI chairman D R Mehta told PTI here, adding that the move was certainly welcome. ``US-64, however, was not among those schemes put forward to the SEBI for scrutiny by the UTI,'' Mehta said.UTI, formed by an Act of Parliament in 1963, is legally not bound by the SEBI regulations on mutual funds, which was approved in 1993 and later amended in 1997. All other mutual funds in the country are regulated by the SEBI under its regulations on mutual funds while UTI has never come under the SEBI scrutiny as the trust was regulated under a separate Act of the Parliament. ``There is no level playing field in the mutual fund sector. UTI is enjoying special benefits under the UTI Act,'' said an industry spokesman.Currently, UTI has about 80 schemes under its fold and manages funds of over Rs 60,000 crore. Mehta expressed hope that UTI would also move US-64 scheme to the SEBI for inspection soon. Currently, SEBI regulations require a mutual fund to have a sponsor and an asset management company.UTI's structure is different from that of other mutual funds, which are set up as trusts and are managed by separate asset management companies."UTI currently has no sponsor. The first thing the government should do is to find a sponsor for the fund," said Dhirendra Kumar, chief executive officer of Value Research, a firm which tracks mutual funds. The sponsor could be the government itself or the development financial institutions, which has put their money for UTI's various schemes, Kumar said. For this to happen, the government should first repeal the UTI Act, which does not have any significance at the present time, he added. UTI to return Govt funds in 3 yearsNEW DELHI: Even though the UTI has not brought the US-64 under the SEBI purview, UTI chairman P S Subramanyam has said it would be able to return Rs 3300 crore it received from the government for salvaging the flagship US-64 scheme in 36 months.``While the government has given us five years to return this money, we will be able to pay it back in three years,'' Subramanyam told UNI. Under the SUS 99 plan, the government had issued public sector bonds equivalent to Rs 3,300 crore as per recommendations of the Deepak Parekh committee which was appointed in October 1998 after a public outcry over the reserves of US 64 turning negative. Initially, the committee had recommended Rs 4800 crore for saving the scheme but with the improvement in the Bombay Sensex, the UTI managed with Rs 3300 crore.
