The Securities Appellate Tribunal (SAT) has ruled in a matter involving the HSBC Mutual Fund. In that case, HSBC had issued a scheme with two plans, viz. a long term plan and a short term plan. The relevant investors had invested in the short-term plan. However, HSBC wound up the long-term plan, and changed the term of the short-term plan by increasing the tenure. This resulted in a fall in the...
Bits of Interest
1. Mutual Funds and Unit Premium The Law-In-Perspective Blog uses the analogy of Ponzi schemes to explain a March 2010 circular of SEBI that prohibits mutual funds from using the unit premium reserve to pay dividends. If one would prefer to avoid the negative connotation associated with a Ponzi scheme, the post also looks at another parallel, being the restrictions under the Companies Act, 1956...
Mutual Funds as Activist Investors
On several occasions, discussions on this Blog have pointed to the inadequacy of shareholder activism (spearheaded by institutional investors) in India, and have therefore called for greater participation of institutional investors in governance processes. A circular issued by SEBI on March 15, 2010 addressed to mutual funds and asset management companies represents an important step towards...
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