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The Association of Mutual Funds in India has sought relaxation of portfolio concentration norms for fixed maturity plans.
SEBI had directed fund houses on September 13, 2012 to ensure that they did not invest over 30 per cent of their total corpus of their debt funds in a particular sector. SEBI had also mandated that fund houses had one year to bring down their holding to 30 per cent and that MFs were directed not to raise their exposure to a particular sector if their holding already exceeded 30 per cent. “We have requested SEBI to relax the norms only for FMPs so that fund houses can hold them till maturity as investors could lose out on returns if these plans are liquidated just to comply with regulation,” said an AMFI official. “Only those FMPs that were launched prior to the circular are affected,” he added.
Traders said FMP’s exposure to NBFCs was about 70 per cent for those maturing in September. “FMPs worth Rs 9,000 crore are maturing in September and redemptions worth Rs 2,000 crore are expected with the rest being renewed,” said a CEO of mutual fund.
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