Among the conditions imposed are, Glit Unit Trusts (GUTS) should be opened ended trusts, underline investment portfolio of GUTs should always be Sri Lankan Government Securities and 90-pct of the investments in GUTs should be treated as liquid assets.
Securities and Exchange Commission of Sri Lanka says, the latest move is part of the government’s effort to promote the Unit Trust Industry, which it believes is the most effective instrument to broad base the country’s investor base.
SEC says, promoting the Unit Trust Industry will help increase the share ownership in corporate Sri Lanka among the rural populace of the country, who lack financial literacy and adequate knowledge on stock market operations.
“Gilt Unit Trusts, are unit trusts whose underlying securities are investments made in different medium and long-term government securities , called gilt-edged securities , to achieve its secured, low risk investment objectives. This will result in an increase in the investor base and lead to a growth in the unit trust industry”, added a statement issued by the SEC.
According to SEC, developing the Unit Trust industry has been identified as a priority project under the ten key projects facilitated by the regulator to develop the Island’s capital market.