Brokers body seeks Sebi, FinMin intervention as Franklin closes 6 MF schemes

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Mumbai: The Association of National Exchange Members of India (ANMI), a brokers business body, on Friday sought the intervention of the securities market regulator Sebi and the ministry of finance to guard investor capital in six mutual fund schemes that Franklin Templeton Mutual Fund (FTMF) is shutting down.

Late on Thursday night, Franklin Templeton introduced that it’s closing six debt schemes resulting from extreme market dislocations and illiquidity on account of Covid-19 and unprecedented redemption stress from traders. Collectively these funds managed a corpus of over 25,000 crore.

The six yield-oriented schemes which are being closed embrace Franklin India Low Duration Fund, Dynamic Accrual Fund, Credit Risk Fund, Short Term Income Plan, Ultra Short Bond Fund and Income Opportunities Fund. However, the choice is restricted to the six funds, and the opposite fairness, debt and hybrid funds of Franklin Templeton MF are unaffected by this determination.

“Such an extreme step by FTMF has created panic among their investors as well as mutual fund investors in other debt schemes across asset management companies,” mentioned ANMI.

The brokers body requested Sebi and the finance ministry to arrange an skilled committee to look into the issues of the Franklin Templeton MF schemes and which, in a time certain method, can inform the traders in these schemes as to how their funds shall be repaid.

The letter added that the incident might impression public confidence in debt mutual funds, including that an occasion like this could not result in an erosion of belief within the 24 lakh crore asset administration business.

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