New Delhi: The Ordinance to repeal UTI Act was on October 29 promulgated paving the way for setting up of an asset management company (AMC) for managing the net asset value based UTI-II after the split of the country's largest mutual fund within two months.

Along with the Ordinance to repeal UTI Act of 1963, President A P J Abdul Kalam also promulgated the Ordinance to amend the SEBI (Securities and Exchange Board of India) Act for providing extra teeth to the market regulator besides enlarging its board.

Following the issue of the Ordinance, a notification would be issued for setting up an AMC with an initial corpus of Rs 10 crore by Life Insurance Corporation, State Bank of India, Punjab National Bank and Bank of Baroda with 25 per cent interest each.

Government would carry out a due diligence for UTI-II to enable its privatisation by the proposed AMC, Joint Secretary (capital markets) U K Sinha told reporters.

The chairman and top executives of the proposed company would be appointed by the new management and the professionals would get market-linked pay package.

Till the issue of notification for splitting UTI into two, the mutual fund would continue its operation in the present form.

PTI