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The Insurance Regulatory and Development Authority of India (IRDAI) has approved investment in debt exchange-traded funds (ETFs). “The IRDAI permits debt ETFs with underlying debt securities of Central Public Sector Enterprises, proposed to be launched in India, as an eligible class of investment as part of Mutual Fund exposure,” said SN Jayasimhan, General Manager, Investments, IRDAI.
According to the guidelines brought in by the regulator, debt ETFs should be issued by MFs registered with SEBI and governed by the market regulator. The debt ETF should invest in a basket of securities issued by CPSEs, which is part of a publicly available index.
“The minimum investment by the insurer should not be less than creation unit size, and shall not be reduced to below creation unit size,” it said.
The general rating criteria will be in line with the extant investment norms of the insurance regulators.
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