ANMI seeks Sebi, FinMin intervention as Franklin closes 6 MF schemes

Terming the shut down of six debt schemes by Mutual Fund (FTMF) as an extreme step that has created panic, an umbrella body of brokers on Friday sought regulator and the Ministry of Finance’s intervention to protect investor interest.

FTMF stunned all by deciding to shutter operations of six schemes with assets under management of more than Rs 25,000 crore late Thursday evening, citing redemption pressures and market volatilities in wake of the COVID-19 pandemic. The fund house has said that capital regulator was informed in advance about the decision, which has been taken to protect investor wealth.

ALSO READ: Working on Rs 1 trn fund for MSMEs to provide liquidity: Nitin Gadkari

“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,” the Association of National Exchange Members of India (ANMI) said.

The ANMI wrote to capital watchdog and the Ministry of Finance, seeking their intervention to “protect the hard earned savings” of lakhs of investors.

The body pitched for the formation of an expert committee of mutual fund executives to “determine the precise problem in FTMF schemes”.

ALSO READ: Here’s why NBFC stocks may turn into a heap of trouble for investors

It said the confidence of people in debt mutual funds is at a risk and an event like this should not lead to an erosion of trust in a Rs 24 trillion industry.