Steps taken by Sebi deepened debt markets, says Amfi

Sebi in October 2019 in consultation with Amfi and after deliberations with Mutual Fund Advisory Committee (MFAC) had proposed calibrated reduction in limits for investment in unlisted securities in mutual fund schemes.

The Association of Mutual Funds in India (Amfi) on Thursday said measures taken by the Securities and Exchange Board of India (Sebi) had deepened the debt markets. “The steps announced by the markets regulator have led to managing day-to-day redemptions through orderly liquidation of portfolios,” Amfi said.

In a release, it said, “All mutual funds except one has been able to manage day-to-day redemptions through orderly liquidation of portfolios due to acceptability of underlying securities in secondary market and measures taken by Sebi to deepen debt market.”

Since Franklin Templeton Mutual Fund closed six debt schemes on April 23, there has been a rush by the investors to redeem the money from several categories of debt schemes like credit risk funds and low duration funds.

Sebi in October 2019 in consultation with Amfi and after deliberations with Mutual Fund Advisory Committee (MFAC) had proposed calibrated reduction in limits for investment in unlisted securities in mutual fund schemes.

Amfi CEO NS Venkatesh said: “Measures taken by Sebi over the years, including one in October 19, have deepened the debt markets. Mutual funds have carried out business as usual, including meeting redemptions in the current challenging times.”