News From Press SEBI extends relaxations to valuation of securities in case of COVID-induced restructuring

SEBI extends relaxations to valuation of securities in case of COVID-induced restructuring

SEBI has said that of the two valuation agencies in charge of valuing securities, fund houses must take into account the more conservative valuation of such stressed companies.

Moneycontrol Oct 3, 2020

The Securities Exchange Board of India (SEBI) has allowed the valuation agencies to use discretion while valuing securities held by mutual funds in case the company that has issued the security goes through a debt restructuring. As per SEBI valuation norms for debt funds, if a company defaults on interests or principal, then the valuation agencies revalue the security (this results in a fall in its credit rating) and all debt funds holding their portfolios must revalue accordingly.

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