SEBI has allowed fund
houses to make disclosures that will benefit investors in FMP and other closed
end debt schemes
Mumbai: In order to allow investors to make informed choices about the risks associated with various close ended schemes, SEBI has allowed AMCs to make the following disclosures in their SID/SAI and KIM:
- To disclose credit evaluation policy of investments in debt securities
- To disclose the list of sectors were AMCs would not be investing
- To disclose the type of instruments which the schemes propose to invest viz. CPs, CDs, Treasury bills etc.
- To disclose the floors and ceilings within a range of 5% of the intended allocation in percentage terms in assets like CDs, CPs and NCDs.
- To disclose final portfolio and publicized percentage allocation in trustee meetings after the closure of NFO. Variations between indicative portfolio allocation and final portfolio will not be permissible.
“There will be more clarity for the investors.
It’s an improvement from the current practice.” says Suresh Sadagopan of Ladder7
Financial Services.
According to fund officials, the circular still has some anomalies. They say interval schemes should also be brought under the purview of this circular.
“Interval schemes are also similar to closed
end schemes having pre determined dates of subscription and redemption and SEBI
circular should be applicable to them also. Also, the sectors which appear
risky today may turn attractive tomorrow. There is no clarity on this. The
implementation will be a little tough,” says Jimmy Patel, CEO, Quantum Mutual
Fund.
