Private provident fund trusts, which manage their workers’ PF as well as accounts, have been allowed to invest up to 15 per cent of their incremental deposits in equity or equity-related investments.
In April, the Labour Ministry had allowed retirement fund body EPFO to park a portion of its funds in stock markets.
The ministry has now issued a separate notification for private PF trusts or exempted establishments, allowing them to invest in the stock market.
The private PF trusts are regulated by the Employees’ Provident Fund Organisation. There are over 3,000 such exempted firms, which manage their workers’ provident fund and accounts themselves.
The notification provides that the exempted establishment or private PF trusts can invest a minimum of 5 per cent or up to 15 per cent of their fresh accretions in equity or equity related investments.
As with the EPFO, these trusts will be able to invest in the shares of body corporates listed on the Bombay Stock Exchange (BSE) or the National Stock Exchange (NSE) that have a market capitalisation “of not less than ₹5,000 crore as on the date of investment”.