Franklin Templeton Mutual Fund: Sebi defends its round, asks Franklin to concentrate on returning investor cash

The Securities and Trade Board of India (Sebi) has “suggested” Franklin Templeton Mutual Fund to concentrate on returning the cash that has been caught following the winding up of the six debt schemes to its traders. The regulator, in a late launch on Thursday, defended its October round that required liquid schemes to cap their holdings of unlisted non-convertible debentures (NCDs) at 10% of the corpus.

On Wednesday, Franklin’s international chief, in a convention name with analysts, stated the rule “orphaned” one-third of their funds as these unlisted NCDs couldn’t be traded after the round.

Sebi stated on Thursday the deadline to adjust to these guidelines have been subsequently prolonged after the turmoil within the debt market triggered by Covid-19.

“Regardless of the laws being clear, some mutual fund schemes appear to have chosen to have excessive concentrations of high-risk, unlisted, opaque, bespoke, structured debt securities with low credit score scores and appear to have chosen to not rebalance their portfolios even through the nearly 12 months accessible to them to this point,” stated the discharge.

“Within the present state of affairs, Franklin Templeton ought to concentrate on returning the cash of traders as quickly as potential.” About Rs 26,000 crore of investor cash has been blocked in these six Franklin debt schemes.

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