Finance Ministry allows EPFO to become stock exchange member

The Finance Minister has allowed retirement fund body EPFO to become a member of a stock exchange although its trustees oppose parking even a part of its over Rs 5 lakh crore corpus in equities.

The Department of Economic Affairs has issued a notification under the Securities Contracts (Regulation) Rules Act 1957, permitting the Employees' Provident Fund Organisation (EPFO) to become a member of a recognised stock exchange, according to a release. Market regulator Sebi had suggested that the government facilitate the flow of EPFO funds to equity-linked mutual funds to boost the market.The main recognised exchanges in the country are the National Stock Exchange of India and the BSE.

The Finance Ministry has been pitching for EPFO funds to be invested in the equity markets to maximise their yields. However, following strong opposition from unions in view of the volatile nature of stocks, the EPFO did not opt for equity investment.