Sebi eases default valuation for MFs, allows valuers to make exceptions

According to market participants, the move will help in stalling mark-to-market impact on portfolios of debt schemes due to the cornavirus-related lockdown and provide relief on exposures to NBFCs

The Securities and Exchange Board of India (Sebi) has eased valuation norms for the mutual fund (MF) industry, allowing valuation agencies to make exceptions if there is a default by a corporate bond issuer because of the lockdown or the loan moratorium permitted by the Reserved Bank of India (RBI) leading to asset-liability mismatches.

According to market participants, the move will help stall mark-to-market impact on the portfolios of debt schemes because of the coronavirus-related lockdown and give relief on exposure to non-banking financial companies (NBFCs).  

“This will help reduce mark-to-market impact on portfolios to some extent at an initial stage, as