Review of Provision Regarding Segregation of Portfolio due to the COVID-19 Pandemic

By way of Circular dated December 28, 2018, SEBI permitted creation of a segregated portfolio in a mutual fund scheme by an AMC in case of a credit event, which includes downgrade to below investment grade and subsequent downgrades in credit rating by the SEBI registered CRA. By way of Circular dated September 2, 2020, SEBI has introduced the following modifications to the aforesaid circular, which will be applicable till December 31, 2020:

i.    the date of proposal for restructuring of debt received by AMCs will be treated as the trigger date for the purpose of creation of segregated portfolio, and such proposal of restructuring of debt received by AMCs is required to be immediately reported to the valuation agencies, CRAs, debenture trustees and AMFI; and

ii.    AMFI, on receipt of such information, is required to immediately disseminate it to its members.

Published In:Inter Alia - Quarterly Edition - September 2020 [ English
Date: September 30, 2020