• Regulator sets norms for NPS managers
• Ban on foreign airline FDI in domestic carriers to remain
• Ban mooted on FDI in cigarettes for local sale
• Subscriber base criteria for 2G may face changes soon
• SEBI mulls norms to let investors decide MF fee
• High inland logistics cost makes Indian iron ore less competitive: KPMG
• PEs eye stakes in DLF Assets
• The Pension Fund Regulatory Development Authority (PFRDA) has announced the guidelines for six asset managers hired by it (UTI, ICICI Prudential, Reliance AMC, IDFC, Kotak Mahindra and SBI ) to handle pension contributions of individuals outside government service who will join the New Pension Scheme (NPS) from April this year. According to investment norms, individual members of the NPS will be allowed to choose a fund manager and investment options to suit their risk appetite. PFRDA has recommended three investment options classified as “conservative”, “moderate” and “growth” depending on the risk-reward profile. Members of the scheme can decide the proportion in which their contribution will be allotted to different asset classes. Depending on their choice, their contribution will go into government securities, corporate bonds or shares of companies represented in the National Stock Exchange’s benchmark 50-share Nifty Index. For those who do not want to decide how much of their contribution should go into which scheme, PFRDA has an auto choice, under which the investments in different asset classes will vary according to the age of the member. At the lowest age of entry, 65% of the investment will go into high-risk, high-return equity market instruments, 10% in low-return, low-risk government bonds and 25% in medium-return for credit risk instruments.
• Govt has made it clear that foreign airlines would not be permitted to pick up stakes directly or indirectly in the country’s commercial airline sector. The government told Parliament that no foreign airlines would be allowed to participate “directly or indirectly in the equity of an air service undertaking”. (FE)
• The commerce ministry is considering a proposal to ban FDI in the manufacture of cigarettes for sale in the country, where it is manufactured for domestic consumption. The proposal has been initiated by Department of Industrial Policy and Promotion (DIPP) and is under consideration of the govt. Pending the policy review, the government had deferred the proposal from the Japan Tobacco International, makers of popular Camel and Winston cigarette brands, to raise its stake in its Indian arm. (ET)
• According to sources, the process to change current subscriber base criteria for 2G spectrum has been initiated. The move is significant as in the past, some operators have alleged that firms inflate their subscriber numbers to get additional spectrum. A DoT committee learnt to be looking into the issue of spectrum pricing will now work out a new mechanism to grant additional spectrum to mobile operators. (FE)
• SEBI is learnt to be drafting new norms that would offer mutual fund investors a band or range of entry loads to pick from while purchasing units of a mutual fund. Currently, investors pay an average 2.25% of the sum invested as entry load if they buy the units from a distributor, who is a third party, but they pay nothing if they buy directly from the fund house. The new norms are likely to be announced in a month as details of the plan have not yet been finalized. (FE)
• According to KPMG research, India is not likely to remain the most cost competitive source of iron ore as inland logistics cost in India (specifically the Karnataka and Orissa regions) is five times that in Brazil and Australia. Only the Goa region has a cost of production comparable to that of global players. The f.o.b. (free on board, which means seller pays for transportation of goods to the port of shipment, plus loading costs) cash cost of production in Australia and Brazil is between $15 and $17 a tonne, whereas in Karnataka and Orissa it is between $50 and $60 a tonne. (BL)
• According to sources, a consortium of PE funds, including UAE’s leading financial institution Taib Bank, the Blackstone Group and JP Morgan, is believed to be in advanced negotiations with promoters of DLF Group to pick up a majority stake in affiliate company DLF Assets. The deal, if finalised, would fetch DLF Assets about $400 to $450 million. (ET)
