Street signs: Liquid funds may get boosters, YES Bank's MF foray, and more

Liquid funds may get boosters 
 

The Securities and Exchange Board of India’s (Sebi’s) committee on mutual funds will meet on Monday to decide how liquid funds can be made safer for investors. The move comes after defaults by Infrastructure Leasing & Financial Services created a panic-like situation in the market. Sources say that Sebi’s Mutual Fund Advisory Committee is likely to recommend reduction in the tenure of instruments from 90 days to 60 days. Even the mark-to-market norms may be changed from 60 days to 30 days. At present, liquid funds do not have to mark to market securities that mature under 60 days. However, securities maturing between 60 and 90 days are required to be marked to market, depending on the credit rating. The recommendations of this committee will be sent to Sebi, which will take the final decision. 

Joydeep Ghosh

YES Bank’s MF foray taking shape

YES Mutual Fund (MF) has started filing scheme information documents with the market regulator. The documents filed with Sebi indicate that the fund house, backed by the private bank, may first dabble on the debt-side of mutual fund (MF) products. The fund house has sought approval for a liquid fund and an ultra-short term fund. In July, YES Bank announced that it had received Sebi approval to start a mutual fund business. Once YES MF starts its operations, it would become the 44th player to join the ~22-trillion mutual fund industry. YES MF is yet to announce the appointment of a CEO who would lead the mutual fund business. The bank could use its branch network to distribute mutual funds.

Jash Kriplani

Large FII prunes India holdings

One of the biggest foreign institutional investor (FII) in India has drastically pruned its India exposure in recent months. According to people in the know, this US-based asset manager’s India exposure is down by nearly $1 billion in the past two months. The FII is said to have pared its holding in nearly two dozen domestic stocks, most of them in the blue chip space. The selling coincides with the market fall in the months of September and October when the benchmark indices declined as much as 15 per cent.

Samie Modak