In a move to provide exit option to investors of wound up schemes, SEBI has asked fund houses to list units of wound up schemes on stock exchange platforms in line with units of close end schemes and segregated portfolio.
With this, Franklin Templeton will have to list units of wound up schemes on stock exchanges.
In a circular, SEBI said, “As per MF regulations, there are several steps envisaged with respect to winding up of mutual fund schemes before the scheme ceases to exist. During this process, such units can be listed and traded on a recognized stock exchange, which may provide an exit to investors. Accordingly, the units of mutual fund schemes which are in the process of winding-up in terms of Regulation 39(2) (a) of MF Regulations, shall be listed on recognized stock exchange, subject to compliance with listing formalities as stipulated by the stock exchange. However, pursuant to listing, trading on stock exchange mechanism will not be mandatory for investors, rather, if they so desire, may avail an optional channel to exit provided to them.”
SEBI has asked fund houses, RTAs and exchange platforms to put in place mechanism for order placement, execution, payment and settlement.
Also, the market regulator has clarified that AMC sponsors, trustees and employees cannot transact in the units of wound up schemes.
A CEO requesting anonymity said that this exit option would not make any difference as investors may not find buyers for units of wound up schemes in stock exchange platforms. “There is hardly any transaction on stock exchanges for MF units. Even units of close ended schemes are available at a discount due to demand and supply gap. In addition, the requirement of having demat account to buy such units makes it even more unattractive.”
