Set up special vehicle to give liquidity to MF: Group tells central bank

Foundation of Independent Financial Advisors (Fifa), a mutual fund (MF) distribution body, has demanded setting up of a special purpose vehicle (SPV) by the RBI to provide liquidity for the non-AAA investments of debt MF schemes. "...Banks have provided liquidity to the AAA segment of the market and not to (the entire) space, which is stressed and facing liquidity issues. After the announcement of winding up of schemes of Franklin Templeton, the RBI announced further liquidity measures to provide liquidity to mutual funds, but this, too, has been provided via the banks,” the distributor body said in its representations to the central bank, the Securities and Exchange Board of India (Sebi), and the finance ministry.

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