The Supreme Court (SC) on Friday upheld the validity of Fraklin Templeton’s e-voting process, paving the wave for the wind-up of the asset manager s six debt schemes. In addition, it has appointed SBI Funds Management the authorised entity to work on the monetisation of assets. “Franklin Templeton Mutual Fund will provide all assistance and cooperation to SBI Funds Management to monetise the assets. The decision of the Supreme Court to dispense with voting under regulation 41 reduces any potential delay in commencing active monetisation of assets,” said a Franklin spokesperson. Earlier this week, the apex court had approved of the mechanism proposed by SBI Funds Management to distribute Rs 9,122 crore to unitholders of the six debt schemes. The distribution mechanism was framed in consultation with the Securities and Exchange Board of India and Franklin Templeton MF.
Investors returning to credit risk funds, tweak debt fund strategy
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Synopsis
The run on credit risk funds was triggered by the Franklin Templeton Mutual Fund’s decision to shut down six of its popular schemes last year due to huge exposure to lower grade papers.
Industry experts are advising investors to tweak their strategy further.
NEW DELHI: As rising bond yields have started eating into debt fund returns over the past couple of months, some investors have started taking bigger bets in the comparatively riskier funds in pursuit of higher returns.
Monthly disclosure by Association of Mutual Funds in India (Amfi) showed investors poured Rs 366.44 crore in credit risk funds in January after nine months of abstinence. During these months, this category of funds saw net withdrawal of Rs 56,317.27 crore.
The Supreme Court has clarified that SBI Fund Management, and not SBI Mutual Funds, will be responsible for distribution of Rs9,122 crore to unit-holders of the six wound-up Franklin Templeton schemes. The SBI Fund Management also sought protection from any liability arising from the fund distribution exercise.
Synopsis
The Supreme Court of India has approved the distribution frame work submitted by SBI Mutual Fund to distribute Rs 9,122 crore to the unitholders in Franklin case.
Agencies
The Supreme Court of India has approved the distribution frame work submitted by SBI Mutual Fund to distribute Rs 9,122 crore to the unitholders in Franklin case. SBI Mutual Fund had submitted their distribution mechanism after consultation with Securities and Exchange Board of India (Sebi) and Franklin Templeton Mutual Fund. The matter has now been posted for hearing on 17 February 2021 to consider other aspects of the appeal. “As requested by us, the hon’ble Supreme Court, in their order passed on 2 February 2021, directed the distribution of INR 9,122 crore (distributable surplus as of 15 January 2021) to respective unitholders in proportion to their holdings in the schemes under winding up and appointed SBI Mutual Fund to undertake the distribution exercise,” said Franklin Templeton Mutual
The Supreme Court has clarified that SBI Fund Management, and not SBI Mutual Funds, will be responsible for distribution of Rs 9,122 crore to unitholders of the six wound-up Franklin Templeton schemes. The SBI Fund Management also sought .