ANMI seeks a high-powered committee to take over management of Franklin Templeton MF

In an unprecedented move, the stockbrokers’ association ANMI has asked the market regulator SEBI to appoint a high-powered committee to take over the management of Franklin Templeton Mutual Fund house and examine its investment decision.

Last week, Franklin Templeton shut its six yield-oriented dent schemes, including Franklin India Ultra Short Bond Fund, Franklin India Income Opportunities Fund, Franklin India Low Duration Fund, Franklin India Dynamic Accrual Fund, Franklin India Credit Risk Fund and Franklin India Short Term Income Plan.

ANMI has requested the Finance Ministry and SEBI to safeguard further erosion of investors’ wealth and to inform the investors of these six schemes in a time-bound manner about the modalities to get back their investments.

In its letter dated April 26, ANMI said that closure of the six schemes has sent shock waves to the entire mutual fund investing community.

“When market slowdown gripped the economy, there was a substantial price erosion in low rated papers in the debt market, where FTMF had heavily invested forcing them to stop the redemption,” ANMI has alleged.

As a result, the mutual funds are concerned about the potential redemption crisis in the nation’s asset management industry owing to the collapse of Franklin Templeton’s schemes. Asset managers are seeking bank loans to contain the fallout of large redemptions. According to sources, in the last few days, several fund houses had borrowed over Rs 4400 crore in order to manage redemption pressure.

It is worth mentioning here that over the last few weeks, the Indian debt market has been highly volatile due to sharp outflows by foreign portfolio investors amid the COVID-19 pandemic. And the nationwide lockdown has only intensified the problems faced by debt markets.

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