Thursday, Jul 02, 2020 | Last Update : 12:20 PM IST

100th Day Of Lockdown

Maharashtra180298931548053 Tamil Nadu94049529261264 Delhi89802599922803 Gujarat33318240381869 Uttar Pradesh2405616629718 West Bengal1917012528683 Rajasthan1831214574421 Telangana173578082267 Karnataka165148065253 Andhra Pradesh152526988193 Haryana1494110499240 Madhya Pradesh1386110655581 Bihar10204781173 Assam8956583212 Jammu and Kashmir76954856105 Odisha7316535333 Punjab56683989149 Kerala4594243626 Uttarakhand2791190937 Chhatisgarh2339193713 Jharkhand2339160512 Tripura140110931 Manipur12605790 Goa11984783 Himachal Pradesh9796179 Puducherry73930112 Nagaland5351820 Chandigarh4463676 Arunachal Pradesh182601 Mizoram1601230 Sikkim88490 Meghalaya50421
  Business   Market  29 Apr 2020  SEBI eases compliance norms for mutual funds on unlisted debt

SEBI eases compliance norms for mutual funds on unlisted debt

PTI
Published : Apr 29, 2020, 9:45 am IST
Updated : Apr 29, 2020, 9:45 am IST

Mutual funds were required to comply with the highest investment limit of 15 percent and 10 percent in unlisted NCDs by 31 March and 30 June

 SEBI extended the deadline by six months for mutual funds to comply with the highest limits of investment in unlisted non-convertible debentures. (PTI Photo)
  SEBI extended the deadline by six months for mutual funds to comply with the highest limits of investment in unlisted non-convertible debentures. (PTI Photo)

New Delhi: Markets regulator SEBI on Tuesday extended the deadline by six months for mutual funds to comply with the highest limits of investment in unlisted non-convertible debentures (NCDs).

Mutual funds were required to comply with the highest investment limit of 15 percent and 10 percent in unlisted NCDs by 31 March and 30 June, respectively.

 

At the same time, the regulator has also eased compliance norms with regards to grandfathering of the existing unlisted NCDs, the Securities and Exchange Board of India (SEBI) said in a circular.

The move will give breather to the mutual funds as they will not be forced to stress-sell these existing unlisted NCDs.

Under the norms, mutual funds need not to invest in unlisted debt instruments including commercial papers other than the government and money market instruments as well as derivative products such as interest rate futures (IRF), which are used for hedging by them.

These norms are aimed at enhancing the transparency and disclosure for investment in debt and money market instruments by mutual funds.

However, mutual fund schemes have been allowed to invest in unlisted NCDs not exceeding 10 percent of the debt portfolio of the scheme subject to the condition that such unlisted NCDs have a simple structure.

Now, the regulator has extended the timeline by 6 months for compliance with the highest investment limit of 15 percent in unlisted NCDs by 30 September, and 10 percent by 31 December.

Further, the grandfathering of the existing unlisted NCDs has been exempted from adherence from the maximum limit guidelines, subject to compliance with investment due diligence and all other applicable investment restrictions.

The regulator in October allowed existing investments of mutual fund schemes in unlisted debt instruments, including NCDs, to be grandfathered till maturity date of such instruments.

Tags: commercial papers, interest rate futures, mfs, money market instrument, mutual funds, ncds, sebi, unlisted ncds
Location: India, Delhi, New Delhi