The Securities and Exchange Board of India (Sebi) has introduced more checks and balances for debt mutual funds (MFs) to secure investors and stem systemic risks.
The SEBI has made early redemptions from liquid funds more expensive and strengthened norms for debt mutual funds’ lending against shares to make these products safer for investors.
Ajay Tyagi, chairman, SEBI said on Thursday “We don’t think we are late. The measures we have taken will help revive the confidence of investors, especially those investing in debt MFs”. “We don’t recognise any such standstill agreement. MFs are not banks and they are investing, not lending,” Tyagi stated.
Meanwhile, SEBI has relaxed the threshold for companies for paying brand usage or royalty charges. Earlier, the regulator wanted companies to seek approval of a majority of minority shareholders if such payments exceeded 2% of the annual consolidated turnover. However, SEBI has now said such approval will be needed only if the royalty payments exceed 5%.
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