Liberal norms for private PFs

More autonomy for private PFs Can invest a higher proportion of funds in shares and corporate debt Will ensure greater flexibility while making investment decisions New norms to be effective from April 1, 2009

The investment guidelines for private provident funds are being reworked. The revised norms are more liberal and allow a higher proportion of their corpus to be invested in stock markets and corporate debt.

Private PFs can now put 15 per cent of their corpus in shares, up from the present limit of 5 per cent. What’s more, they can also invest up to 40 per cent of their corpus in corporate debt paper, up sharply from the current limit of 5 per cent.

The new guidelines will come into effect from April 1, 2009. The objective is to give greater flexibility to private PFs to generate higher returns while at the same time adding more depth to the stock and corporate debt markets.

—RJ