Mutual fund AUM touches record high in May

Over the last few years, election result days have witnessed stock market indices bouncing up by wide margins. And May 23 was no exception, the S&P BSE Sensex jumped over 2.5% to touch the then life-high of 40,124.96 points.

The latest industry data released by the Association of Mutual Funds in India (AMFI) for the month of May shows there was similar euphoria in the mutual funds industry as well.

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7 new rules Sebi has issued for mutual funds industry

The Securities and Exchange Board of India (SEBI) has introduced tightened norms for the close to Rs 26 lakh crore mutual fund (MF) industry. In the wake of the recent credit events in the fixed income market that had spiked MF liquidity risk, SEBI had constituted working groups representing AMCs, industry and academia to review the risk management framework with respect to liquid schemes as well as an internal working group to review norms for MF investment in various debt and money market securities.

"The measures we have taken will help revive the confidence of investors, especially those investing in debt MFs," said Ajay Tyagi, SEBI Chairman. Based on the recommendations thrown up by these groups, SEBI approved of a host of changes at its June 27 board meeting. Here are the key proposals that got the nod:

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Sebi tightens regulations for troubled debt mutual funds

The Securities and Exchange Board of India (Sebi) has tightened rules for debt mutual funds in the wake of the recent credit crisis that led to the values of these schemes taking a hit. The regulator has made early redemptions from liquid funds more expensive and strengthened norms for debt mutual funds’ lending against shares to make these products safer for investors.

This, along with a raft of decisions including stricter disclosures for promoters’ share pledges, easier norms for issue of shares with differential voting rights (DVRs) and minority shareholder approval for higher royalty payments, were taken at the regulator’s board meeting on Thursday.

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Source: AMFI, Economic Times, Fortune India

Disclaimer – This document is for general information only and does not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this information. Investments in mutual funds and secondary markets inherently involve risks and recipient should consult their legal, tax and financial advisors before investing.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

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