Page 18 - Banking Finance September 2021

MUTUAL FUND

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Mutual Fund News
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Bajaj finserv gets approval MF business to penetrate geographies court ruled that such a vote is re-
beyond the top-30 cities, which are quired, and accordingly, consent of
for setting MF
known as B-30 locations in industry unitholders was sought in December
Financial services giant Bajaj Finserv parlance. 2020 and granted. Following the vote,
said it has received in-principle ap- the Supreme Court placed SBI Funds
proval from the Securities and Ex- Franklin to distribute Rs. Management Pvt. Ltd in charge of the
change Board of India (SEBI) for setting winding-up process.
up a mutual fund (MF). 2918.5 crore to unitholders
"Accordingly, the company would be Franklin Templeton Mutual Fund will The Securities and Exchange Board of
setting up an Asset Management Com- distribute Rs. 2,918.5 crore to India (Sebi) imposed penalties on
pany and the Trustee Company, di- Franklin Templeton Mutual Fund and
unitholders of six debt mutual fund
rectly or indirectly i.e., itself or schemes, according to a note issued by some of its directors and barred it from
through its subsidiary in accordance launching new debt mutual fund
the fund house to mutual fund distribu-
with applicable SEBI Regulations and tors. schemes for two years. However, the
other applicable laws," Bajaj Finserv's Securities Appellate Tribunal stayed
disclosure on exchanges read. Bajaj With this, the schemes will have cumu- Sebi's orders in this matter.
Finserv had applied for an MF licence latively returned Rs. 23,998.84 crore to Investors in the six different schemes
from SEBI. investors or 96.18% of the net asset have received different levels of repay-
value of the six schemes that were
The entry of Bajaj Finserv is likely to ment. Those in Franklin India Low Du-
wound up on 23 April 2020.
add to the competitiveness in the in- ration Fund would have received
dustry, which already has 42 MFs. SBI Funds Management Pvt. Ltd is 107.86%, including the upcoming Sep-
While a large chunk of the market overseeing the liquidation of the tember 2021 payout. Those in the
share (57.85 percent of investor as- schemes and the distribution of their Franklin India Short Term Income Plan,
sets) is controlled by the top five fund proceeds, in line with the direction of however, would have received 84.43%.
houses, a new entrant such as Bajaj the Supreme Court. Once the money Unitholders in Franklin India Ultra
Finserv can gradually gain a solid foot- is paid, a proportionate number of units Short Bond Fund, Franklin India Income
ing given its wide distribution reach. get extinguished. Opportunities Fund, Franklin India
Bajaj Finance, its sister concern, has a The six debt mutual funds were wound Credit Risk Fund and Franklin India
presence in 2,392 locations, including up by Franklin Templeton Mutual Fund, Dynamic Accrual Fund would have re-
1,357 in rural areas, small towns and following heavy outflows. Some inves- ceived 99.58%, 94.53%, 93.35% and
villages. tors challenged the winding-up process 93.09%, respectively.
This vast branch network can help the and sought a vote on this. The apex A key factor to watch out for Franklin

18 | 2021 | SEPTEMBER | BANKING FINANCE