The Government last week announced its intent to split UTI into UTI-I and UTI-II. UTI-I will include US-64 and assured return schemes, for which the Government is coming up with a Rs 20,000-crore bail-out package. UTI-II will have the other NAV-based schemes and will be professionally managed and eventually privatised.

The Government has assured that all the commitments in the assured return schemes, including Monthly Income Plans, will be met as and when they become liable.

UTI G-Sec dividend: The UTI has announced a dividend of 4 per cent for UTI G-Sec Fund. Investors as of September 6 in the Income Option will be eligible for the dividend. The corpus of this option is Rs 181 crore.

Templeton IBA dividend: Templeton India Mutual Fund has announced a dividend of 1 per cent for Templeton India Income Builder Account (TIIBA) for the Monthly dividend plan. In FT India Monthly Income Plan (FTIMIP) an open end income scheme with no assured returns, a dividend of 0.75 per cent (Rs 0.075 per unit of face value of Rs 10) has been declared under the monthly dividend plan.

All investments in these options as on August 30, 2002 are eligible for this dividend and the ex-dividend NAV date is September 2, 2002.

AMC directors: The Securities Exchange Board of India (SEBI) has announced changes to the norms for directorships in asset management companies (AMC) of mutual funds. The notable features are:

Persons providing any professional service to a mutual fund, AMC, trustee company and sponsor shall be treated as an associate director on the board of the AMC or the trustee company.

A person considered an associate director cannot be appointed as independent director even after he ceases to be an associate director till a cooling-off period of three years lapses.

50 per cent of the board of the AMC and two-thirds of the trustee company must be made up of independent directors.

Any person having a pecuniary relationship with a mutual fund, AMC, trustee company and sponsor company would be treated as an associate director if the trustees feel the relationship will affect the independence of the director.

Templeton-Pioneer consolidation: The first effects of the merger of Templeton and Pioneer ITI are beginning to emerge at the level of the schemes. Franklin Templeton has indicated that common schemes, such as index funds, balanced funds and Prima Plus, would be consolidated. The fund now has 39 schemes, and assets under management amount to Rs 8,300 crore. The fund also plans to offer portfolio management services. It has also indicated that existing investors can rest assured that the investment styles of the schemes will not be altered and fundamental attributes will remain unchanged.

US-64 prices: The repurchase price for unit holdings of up to 5,000 units is Rs 11.20 per unit in September 2002 under the Special Liquidity Package. The package was offered from August 2001 at Rs 10 per unit and is due to end in May 2003 at Rs 12 per unit.

The price for October will be Rs 11.30 per unit. For holdings of over 5,000 units, a repurchase facility linked to the NAV is available from January 2, 2001. For such holdings an assured repurchase price of Rs 10 per unit or NAV, whichever is higher, is available on May 31, 2003, if the units are held till then.

If redeemed earlier, the redemption will be at NAV-based prices, if carried out before May 31, 2003. For less than 5,000 units, the assured repurchase price for May 2003 is Rs 12 per unit. These special repurchase prices will also be available beyond May 2003.

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