InvestorQ : Will the SEBI proposal to list MF schemes help in case like Templeton winding up its debt schemes?
Anamika Sodhani made post

Will the SEBI proposal to list MF schemes help in case like Templeton winding up its debt schemes?

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8 months ago
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SEBI has allowed listing facility for units of mutual fund schemes that are in the process of winding up. A classic example would be what is happening at Templeton right now. The idea is to give investors an exit option, especially for illiquid funds. It is not clear if this will also be applicable with retrospective effect in the case of Templeton 6 schemes. The idea is that prior to winding up, such schemes should be listed on the stock exchange and allowed to trade and discover value. Such trading will mandatorily be in demat form only. This would mean that investors will have to take a haircut on a case-by-case basis. This move was clearly driven by the Templeton fiasco last month when it summarily wound up six debt schemes with total AUM of Rs.26,000 crore. The down side risk could be that it could lead to distress selling and vulture buying which could enable some smart traders to make profits out of the crisis.

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