India’s Market Watchdog Warns Mutual Funds To Stay Away From Crypto Assets At Least Until Regulations Come In

Aniket Jain 2021-12-30 10:12

The Securities and Exchange Board of India (SEBI), India’s market regulator, wants mutual funds to wait before launching new fund offerings (NFOs) based on crypto assets.

Mutual funds should not make such investments, according to SEBI Chairman Ajay Tyagi, until the industry is regulated by legislation.

As of now, India’s Cryptocurrency and Regulation of Official Digital Currency Bill (2021) is still awaiting Cabinet approval – the country’s highest decision-making body, led by Prime Minister Narendra Modi.

“It is prudent for regulated entities with public markets exposure or focus, or any form of public solicitation, to wait for more clarity regarding the legality or definition of digital assets as assets, securities, or commodities in India,” said Nitin Sharma, partner at Antler India and blockchain lead for Antler Global.

The warning from SEBI comes after asset management company Invesco Mutual Fund delayed the launch of its blockchain fund — the first of its kind in India — due to legislative uncertainty, even though they already have the green stamp from SEBI

Conclusion

Invesco isn’t the only Indian mutual fund that wants to become involved in the cryptocurrency market. Navi Mutual Fund also filed a draught for a Blockchain Index Fund of Funds (FoF) with SEBI earlier this month, which will track the IndxxBlockchain Index.

The IndxxBlockchain Index, on the other hand, does not explicitly monitor crypto assets. Instead, it tracks mainstream companies with some crypto activity, such as Nvidia, Advanced Micro Devices, and others. Indian IT behemoths like Infosys, Wipro, and TCS are also included in the index.

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