Soft warnings given to MFs for violating norms: SEBI

SEBI has found some schemes violating norms. To fix this issue, SEBI introduced regulations for debt funds, UK Sinha says

June 26, 2014 1:55 IST | India Infoline News Service
Securities and Exchange Board of India (SEBI) today said that the regulator can take stringent action against fund houses which are found violating debt fund norms.
Speaking at the 10th CII MF Summit in Mumbai, SEBI chairman UK Sinha said that the regulator has found some schemes violating norms which require debt funds to have a minimum of 20 investors with no single investor holding more than 25% of the net assets of a scheme.
In some cases it was a passive violation when investors moved out of schemes during quarter end which resulted in higher concentration of existing investors, Sinha said.
There are 69 schemes which have violated the norms. In one of the cases, SEBI found that a single investor had 98% concentration in a scheme.
SEBI has given soft warnings to mutual funds in the event of violations. To fix this issue, SEBI introduced regulations for debt funds. SEBI has asked fund houses to maintain a minimum of Rs. 20 crore AUM in debt funds on half yearly rolling basis in all open ended debt oriented schemes.
SEBI has also asked fund houses to keep the minimum subscription amount in debt and balanced schemes at Rs. 20 crore during a new fund offer.

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