Mutual fund houses will start parking ₹3,300 crore from next week into the Corporate Debt Market Development Fund (CDMDF) created by capital market regulator SEBI as a backstop arrangement to bailout specified debt schemes in times of market dislocation.
In June, SEBI notified rules for setting up a CDMDF in the form of a closed-ended alternative investment fund, which will be managed by SBI Mutual Fund. Asset management companies will make a one-time contribution equivalent to 2 bps of the AUM of specified debt-oriented schemes. The initial contribution will be based on the AUM of the specified MF schemes as of December 31, 2022.
