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MUTUAL FUND

and AMCs shall disclose the Risk-o- This is yet not driven home at all. All A SEBI statement said the
meter along with portfolio disclosure regulators and government must come appointment was made on December
for all their schemes on their website together to sensitise retail investors 18, 2020, for the e-voting process
and on AMFI website within 10 days that anything instrument they get into scheduled from December 26 to 29.
from the close of each month. the capital market is fraught with risk, The capital market regulator also
Mahalingam said.
Renaming of dividend option constituted a technical assistance
Effective April 2021, mutual funds will His remarks are significant in the team to assist the observer comprising
have to rename dividend options as backdrop of the Franklin Templeton of B.N. Sahoo, Chief General Manager,
income distribution cum capital Mutual Fund case that had grabbed SEBI; Nayana Ovalekar, Chief
withdrawal. headlines in the recent months due to Operating Officer of Central Depository
the fund house winding up six debt Services Limited; K. Sriram , Practising
Inter-scheme transfers mutual fund schemes without the unit Company Secretary and Scrutiniser; M.
From 1 Jan, 2021, inter-scheme holders consent. Franklin Templeton Krishna and Ch. E. Sai Prasad, Assistant
transfer in close-ended funds can only Mutual Fund had closed six debt Directors of the Central Forensic
be done within 3 business days of the mutual fund schemes on April 23, citing Science Laboratory, Hyderabad.
allotment of the scheme's units to redemption pressure and lack of
investors and not thereafter. Sebi liquidity in the bond market. Franklin Templeton have come up with
came out with a circular in October. a statement on the appointment of the
Inter scheme transfers involve shifting Mahalingam noted that "debt funds" observer and the assisting team along
of debt papers from one mutual fund have so far been marketed to retail with contact details of the observer.
scheme to another. Under existing investors as a substitute for "fixed
rules, Sebi only requires that such ISTs deposit" in a bank. 2020 ends in positive for
be done at market prices and that the On the way ahead, Mahalingam said mutual funds
transfer should be in conformity with that entire investor education needed Most of the year, equities, except for
the investment objective of the to be woven around "Safety, Liquidity a few sectors remained hurt due to
recipient scheme. and Returns" (in the particular order pandemic coronavirus. Equity mutual
itself). "Let not the order be reversed funds disappointed the investors, who
'Debt funds, no substitute to return, liquidity and safety. in panic, preferred to redeem their

for fixed deposit' Unfortunately, we find many investors money. Equity mutual funds saw record
go through return, liquidity and safety
Retail investors need to be educated to forget the safety of their breaking monthly outflows this year as
on the risk dimension it carries, says investments completely. That's a reason investors started to lose hope after
SEBI's Mahalingam why many investors get caught in Ponzi over two years of under performance
Asserting that "debt funds" are no schemes, fly by night operators and all by the equity schemes. However, as we
substitute for "fixed deposits" in a that. If misselling has to be avoided in came closer to the end of this year,
bank, capital market regulator SEBI on the system, then the order has to be positive news about development of
Monday said that perception of "debt Safety, Liquidity and Return", he said. covid vaccines cheered equities soon.
funds" need to be looked from investor In fact the major stock market indices
education now. SEBI Appoints Ex-CEC as broke their records to reach all time
high levels in 2020.
Addressing an NCAER organised Observer for E-voting in
workshop on "Investor Education and Mid and small cap mutual funds which
Protection in the Securities Markets", Franklin Templeton Funds were laggards at the beginning of the
Mahalingam said that debt funds are far SEBI has appointed former Chief year, bounced back to become the best
removed from a fixed deposit, and it Election Commissioner (CEC) Taruvai performing categories across equity
should be driven into the minds of retail Subayya Krishnamurthy as the observer mutual funds at the end of the year.
investors that debt funds carry with for the e-voting process of unit holders Some analysts believe the next year,
themselves a risk dimension and they of six shut schemes of Franklin 2021 will be the year for mid and small
are not a substitute of fixed deposits. Templeton Mutual Fund. caps to outshine the stock markets.

16 | 2021 | JANUARY | BANKING FINANCE