He tracks mutual funds, insurance, pension, PMS, fixed income/debt and alternative investments markets closely. downgrade in credit rating by a SEBI registered Credit Rating Agency (CRA), as under:• Downgrade of a debt or money market instrument to ‘below investment grade, orFund-houses usually will not charge investment and advisory fees on the segregated portfolio.Franklin Templeton Mutual Fund proposes to include provisions related to creation of segregated portfolios in the Scheme Information Document (SID) of Franklin India Liquid Fund, Franklin India Overnight Fund, Franklin India Floating Rate Fund, Franklin India Savings Fund and Franklin India Government Securities Fund.Other schemes for the segregated portfolio development include Franklin India Corporate Debt Fund, Franklin India Dynamic Accrual Fund, Franklin India Low Duration Fund, Franklin India Short Term Income Plan, Franklin India Income Opportunities Fund, Franklin India Ultra Short Bond Fund, Franklin India Credit Risk Fund, Franklin India Banking & PSU Debt Fund, Franklin India Equity Hybrid Fund, Franklin India Debt Hybrid Fund, Franklin India Pension Plan and Franklin India Equity Savings Fund.“We have received approval from the Board of Directors of the Franklin Templeton Asset Management (India) Pvt.

Ltd. (investment manager for schemes of Franklin Templeton Mutual Fund) and Franklin Templeton Trustee Services Pvt.

Franklin Templeton Mutual Fund has decided to segregate the bonds of Vodafone Idea held by its debt schemes, effective January 24, after ratings firms cut the telecom company’s securities below the investment grade.

If they cannot do this analysis, they must focus on the process being followed and fund manager expertise – is it sufficiently robust?" They join UTI Mutual Fund, Nippon India Mutual Fund and PGIM India Mutual Fund in “side-pocketing" or segregating their exposures to Yes Bank bonds. He can be contacted at kumarsroy@rupeeiq.com. Franklin Templeton Mutual Fund has proposed to include provisions related to creation of segregated portfolios in 17 schemes, effective December 26, 2019 Kumar is a financial journalist, with a functional experience of 15 years.

The trustees of the AMC are supposed to monitor the recovery of proceeds in the side-pocketed bonds. The NAV of the schemes will not change since Franklin Templeton MF has already written down the full value of the Vodafone debt. Franklin Templeton Mutual Fund has proposed to include provisions related to creation of segregated portfolios in 17 schemes, effective December 26, 2019In order to ensure fair treatment to all investors in case of a credit event and to deal with liquidity risk, SEBI has permitted creation of segregated portfolio of debt and money market instruments by mutual funds schemes vide SEBI circular No.

Kumar Shankar Roy is contributing editor with RupeeIQ.

In terms of prevailing regulatory requirements, unitholders in the aforesaid Scheme(s) are given an option to exit at the prevailing Net Asset Value (NAV) without any exit load, in case they do not wish to continue in the said Scheme(s) in view of the change in the fundamental attribute.The period of this no load exit offer is from November 25, 2019 to December 24, 2019 (both days inclusive). On 24th January, Franklin Templeton Mutual Fund side pocketed its holdings of Vodafone Idea debt.

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side pocketing is the creation of a separate portfolio in lieu of troubled debt.

He has worked for The Times of India, The Hindu Business Line, Deccan Chronicle Group, DNA, and Value Research, among others, across different cities in India.



SEBI/HO/IMD/DF2/CIR/P/2018/160 dated December 28, 2018.The term ‘segregated portfolio’ means a portfolio, comprising of debt or money market instruments affected by a credit event, that has been segregated in a mutual fund scheme. The redemption request for this purpose may be submitted at any of Official Points of Acceptance of Transactions (OPAT) of Franklin Templeton Mutual Fund, and the NAV applicable will be based on the day and time the application is received at any of the designated OPAT.Unitholders who do not exercise the exit option on or before 3.00 p.m. on December 24, 2019 would be deemed to have consented to the proposed change.However, the exit option without load will not be available to investments in the said Scheme(s) made on or after November 25, 2019. However those who exited the schemes between 16th and 24th January will not benefit.