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EPFO to appoint custodian for its securities by month end

EPFO to appoint custodian for its securities by month end
PTI
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First Published: Sun, Jul 17 2011. 11 41 AM IST
Updated: Sun, Jul 17 2011. 11 41 AM IST
New Delhi: EPFO’s apex decision making body Central Board of Trustee (CBT) is likely to appoint by the month-end a separate custodian for its securities which runs into thousands of crores of rupees.
“The EPFO trustees are likely to meet by this month end to finalise the appointment of custodian for its securities (investment)”, a source said.
In the present scenario, asset management firms managing Employees’ Provident Fund Organisation’s (EPFO) corpus also function as bankers and custodian of the retirement fund body.
EPFO wants to separate the three function—custodian, fund management and banker service to keep “fund managers at arm’s length distance from custodians”.
During the first stint of multiple fund managers from 17 September, 2008 to 31 March, 2011, SBI continued to keep securities purchased by them with its own custodian unit.
The other three fund managers—ICICI Pru, Reliance Capital and HSBC AMC appointed HDFC Bank as custodian for the securities purchased by them for EPFO. The fee for the custodian service was paid by the three fund managers.
But now the EPFO wants to directly have a custodian and has incorporated the clause in its bid document for appointment for fund managers.
EPFO appointed selection committee had issued request for proposal (RFP) to all the 19 such entities (custodians) registered with Securities and Exchange Board of India.
According to sources, the technical bids for appointment of custodians has already opened on 15 July and the financial bids would be unsealed on 19 July.
EPFO wants to appoint the custodian for a term of three years in synchronisation with tenure for multiple fund managers beginning 1 September this year.
The retirement fund body had appointed SBI, ICICI Securities Primary Dealership, HSBC AMC and Reliance Capital on Thursday for three year term beginning on 1 September.
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First Published: Sun, Jul 17 2011. 11 41 AM IST