Initial contributors to UTI should infuse permanent funds of atleast Rs.500 crores.

The PSU portfolio should be transferred at book value to a Special Unit Scheme (SUS 99) to be subscribed for by GOI by the issue of dated GOI securities.

US-64 should make a strategic sale of its significant equity holdings by negotiation to the highest bidder to ensure fetching the best value for the unit holder.

1. The investment sub-limit of Rs.10,000 for tax benefit on Equity Linked Savings Schemes should be removed and benefit should be extended to US-64 and all schemes investing more than 50% in equity.

2. Income distributed by US-64 and schemes investing more than 50% in equity should be exempt from tax.

New schemes for investing in growth stocks in IT, Pharma and FMCG sectors should be launched, to be subscribed for by banks.

The size of the UTI Board should be increased to 15, with additional five members being co-opted by the Board.

1. Trustees should assume higher degree of responsibility and exercise greater authority.

2. The remuneration of Trustees should be increased and their attendance record be published in the Annual Report.

There should be a separate Asset Management Company for US-64 with an independent Board of Directors.

1. Chinese walls should be created by appointing separate and independent fund managers for each scheme.

2. Inter-scheme transfers must be based on independent decisions and requirements of concerned fund managers and at market determined prices.

1. There should be an independent fund manager for US-64 with full responsibility and accountability.

2. The fund manager should be helped by a strong research team and the research capability should be strengthened.

1. Investment/dis-investment decisions should be based on research analysts' recommendations who should have the authority and responsibility of making the recommendations.

2. The fund manager should have the final authority and responsibility in decision making based on his perception of the market and research inputs

The focus on small investors should be strengthened and the lilt towards corporate investors reduced.

1. US-64 should be NAV driven within three years.

2. If at the end of the three year period, the re-purchase price and the NAV are not in line, the Trust will be left with no alternative but to seek GOI support once again the provide the difference between the NAV and the repurchase price. Only a clear commitment from the GOI to stand by US-64 till it finally assumes the character of a NAV driven scheme will instill the required confidence in the US-64 investors.

The spread between sale and repurchase prices should be gradually increased to deter short term investors.

1. The dividend distribution policy needs to follow a more conservative approach to build up sufficient reserves during periods of good performances.

2. As a rule, dividends need to be curtailed when there is inadequate income.

The rate of return offered to investors needs to be reviewed on a periodic basis. The yield offered on US-64 is excessively high as compared to other comparable instruments.

The composition of the portfolio needs to be changed to provide for more weightage to debt consistent with the objectives of the Scheme.

The operations of US-64 should be brought under SEBI purview at the earliest.

An independent professional firm should be commissioned for a detailed review of asset management processes including back office, inter scheme transfer and investor servicing.