Sebi raises mutual fund exposure limit for HFCs

Tags: Mutual Funds
Providing more leeway for housing finance companies (HFCs), the market regulator Securities and Exchange Board of India (Sebi) on Monday relaxed the the investment limit for such entities in debt mutual funds.

The decision to relax the investment limit for HFCs was taken by Sebi at its board meeting held in October.

“... In light of the important role played by HFCs in the housing sector, it has been decided that an additional exposure not exceeding 10 per cent of net assets of the scheme shall be allowed only to HFCs as part of financial services sector for prudential limits in debt-oriented schemes,” Sebi said in a circular on Monday.

The total investment in HFCs shall not exceed 30 per cent of the net assets of the scheme.

Sebi said the relaxation would be subject to certain conditions such as that the securities issued by HFCs were rated AA or above. Also, HFCs should have been registered with the National Housing Bank (NHB).

In October, the market regulator had said the decision to relax investment limit was taken after taking into consideration the important role played by HFCs in fulfilling the social objective of increased home ownership and supporting the economy by creating demand for construction of new homes.

Certain debt mutual fund schemes, such as long-term fixed maturity plans (FMP) preferred route for the NBFC (non-banking finance company) sector to raise medium to long term funds at attractive rates.

Under the regulatory framework, NBFCs include HFCs.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • It will take at least 4 more quarters for corporate bottomlines to turn around

    Aggregate numbers from corporate results in the June quarter of 2014-15 are hardly different from the previous six quarters, with no positive surprise

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Tushar Gandhi

Dealing with a sin called insensitivity

Rage and the notion of being above the law — ...

Kuruvilla Pandikattu SJ

India’s greatest gift to the world

What we hear most often about India these days is ...

Gautam Gupta

Why must innerwear be our best kept secret?

While women’s outerwear rules the marketing roost in India, unfortunately, ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture