UTI plans Singapore listing for India equity ETF on Nov 12
The fund will buy units in an India-listed ETF, with its prospectus outlining a potential tax exemption that Indian authorities could challenge.
UTI Asset Management is preparing to list the UTI India Nifty 50 Index ETF VCC in Singapore on Nov 12. The fund will give investors exposure to Indian equities through an India-listed exchange-traded fund rather than through direct share purchases.
Its prospectus says the feeder arrangement allows the fund to claim an India-Singapore tax treaty exemption, avoiding capital gains tax of 12.5 per cent for long-term holdings and 20 per cent for short-term investments. However, it also warns that Indian authorities could dispute the expected exemption on gains from selling Indian mutual-fund units.
Between 95 per cent and 100 per cent of the fund’s assets will go into the India-listed UTI Nifty 50 ETF. The Singapore product will be traded on SGX in both US dollars and Singapore dollars, with annual fees of up to 0.43 per cent.
UTI says the product will be the first Nifty 50 ETF listed in Singapore. It also says it will be the first MAS-authorised retail feeder fund to invest directly in a fund domiciled in India.
The initial offer closes on Nov 6, with shares priced at US$1 each. Phillip Securities, Flow Traders Asia and North Point Global will serve as market makers.
