SEBI relaxes valuation norms for mutual funds
PrintListen to this Article
0:00
0:00
The Securities and Exchange Board of India (Sebi) on Thursday relaxed valuation norms on money and debt market instruments held by mutual funds in the wake of the loan moratorium for companies by the Reserve Bank of India on account of the business disruptions caused by the ongoing lockdown.
The capital markets regulator said if valuation agencies are of the view that a delay in interest or principal amount or extension of maturity of a security has arisen solely due to lockdown or in light of the RBI moratorium, which has created temporary operational challenges in servicing debt, they may not consider it as default for valuing debt market securities held by fund houses. Valuations of debt market instruments for mutual funds’ net asset value (NAV) are done by the arms of rating agencies.
“In view of the nationwide lockdown and the three-month moratorium/deferment on payment permitted by RBI, a differentiation in treatment of default, on a case-to-case basis, needs to be made as to whether such default occurred solely due to the lockdown or loan moratorium,” Sebi said in a circular.
With this, valuation agencies may not treat the default due to the moratorium in NAV calculations. The move comes as a relief to mutual funds and borrowing companies as a delay in payment would have hit NAVs of debt schemes, which have to mark down values based on the valuations assigned by agencies.#casansaar(Source - Economic Times)
The capital markets regulator said if valuation agencies are of the view that a delay in interest or principal amount or extension of maturity of a security has arisen solely due to lockdown or in light of the RBI moratorium, which has created temporary operational challenges in servicing debt, they may not consider it as default for valuing debt market securities held by fund houses. Valuations of debt market instruments for mutual funds’ net asset value (NAV) are done by the arms of rating agencies.
“In view of the nationwide lockdown and the three-month moratorium/deferment on payment permitted by RBI, a differentiation in treatment of default, on a case-to-case basis, needs to be made as to whether such default occurred solely due to the lockdown or loan moratorium,” Sebi said in a circular.
With this, valuation agencies may not treat the default due to the moratorium in NAV calculations. The move comes as a relief to mutual funds and borrowing companies as a delay in payment would have hit NAVs of debt schemes, which have to mark down values based on the valuations assigned by agencies.#casansaar(Source - Economic Times)
Category : SEBI | Comments : 0 | Hits : 251
SEBI Mandates AIFs to Upload NAV Data on Depository Platforms To strengthen disclosure standards and streamline processes, the Securities and Exchange Board of India (SEBI) has instructed Alternati...
India's securities regulator has accused current and former executives at the local units of PwC and EY, among others, of breaching insider trading rules involving a 2022 share sale by Yes Bank, a...
A financial influencer, also known as finfluencer, who was also involved in imparting training related to stock market trading has been asked to part with a little over ?12 crore, which it made unlawf...
Comments