The Hindu Business Line : To streamline investors' accountng operations — Benchmark plans to buy back fractional units of Liquid BeEs

BENCHMARK Mutual Fund has arranged to buy back fractional units of its liquid product with a view to streamline the accounting operations of its investors.

Liquid BeES, which is said to be the first scheme of its kind to be listed on a stock exchange, the NSE in this case, provides daily dividends to unit holders. Such dividends, as in the case of many other liquid options, are compulsorily re-invested in the units on a daily basis.

The dividend units are uploaded periodically in the demat accounts of the investors concerned, maintained with various depository participants. Incidentally, these units are uploaded up to three decimal points, to ensure that nothing is lost due to rounding off of the figure involved. The fractional units, however, cannot be traded on the stock exchange. For the latter, the minimum trading lot is one unit.

The facility is aimed at making life simpler for investors, said Mr Sanjiv Shah, director of Benchmark MF. It was worked out after getting a definite feedback from the market, he added. "We have introduced this across the board, applicable to all classes of investors," he mentioned.

The situation on the ground has led to a piquant state of affairs - a number of investors have ended up with fractional units of Liquid BeES in their demat accounts. The two depositories - NSDL and CDSL - have waived charges for custody and transactions with regard to the scheme. The latest proposal from Benchmark MF is aimed at providing relief to investors, who can now streamline their accounts.

The buy back of fractional units of Liquid BeES will be at NAV, the MF has observed, adding that the arrangement is free - without any load or service costs. The process is a two-step affair, beginning with the transfer of the units to the demat account of Benchmark AMC Pvt. Ltd. Intimation is to be sent to the MF - e-mailed is possible - on receipt of which (and the units), the amount involved will be sent to the investor within a reasonable time.

Liquid BeES, like other products from the Benchmark MF stable, is structured in the form of an exchange-traded fund. It invests in call money, short-term government paper and money market instruments of various maturities. Flagged off in July 2003, it is listed on NSE.