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The matter is long pending with high-level committee on capital markets comprising heads of RBI, SEBI, IRDA and officials of finance and company affairs ministries, sources said adding SEBI has no objection in allowing Indian mutual funds to invest up to $1 billion in equity of companies listed in indices like Dow Jones Global Titans Index.
A senior SEBI official confirmed this and said it was for RBI to come up with the guidelines, as mutual funds need to invest the money in foreign currencies.
UTI AMC had proposed to launch a global fund for Indian investors when M Damodaran was at its helm. Damodaran then became the SEBI chairman. "So, there is no reason why SEBI will have any objection, " an informed source said.
The present norms permit Indian mutual funds to invest in equity of MNCs, which have a joint venture in India with at least 10 per cent.
There are about 48 such companies. Many of the global corporations like Wal-Mart, Microsoft, Intel, Vodafone, Bank of America, Barclays and UBS do not have joint ventures in India but are part of the DJ Global Titans Index.
India's leading mutual funds like UTI AMC, Principal PNB, Templeton, DSP Merrill Lynch, ICICI Prudential and HDFC Standard Life have sought changes in the investment pattern.
They also sought permission for launching offshore funds that invest in such global indices.
Apart from the DJ Global Titan Index, sources said, Indian mutual funds have also sought permission for investing in global companies, which could offer not only long term growth in profits but also take care of changes in environment, human resource and regulatory aspects.
The Indian mutual funds are in no hurry, as the US and other matured equity market was not offering the kind of returns seen in Indian bourses.
However, some of the mutual funds want to diversify their portfolio and cater to investors appetite in investing in Fortune-500 companies.