Liquid mutual fund schemes will have to hold at least 20 per cent in liquid assets like gilts
India’s market regulator on Thursday raised disclosure norms for pledging of shares by promoters of companies and tightened rules for mutual funds in the country in an effort to protect minority shareholders and retail investors.
The Securities and Exchange Board of India (SEBI) also put a cap of 5% of net sales on royalty paid by companies to their parents or promoters and mandated companies to get shareholder approval for royalty payments above the cap, it said in a release after its board meeting, news agency Reuters reported.
The need for higher transparency on pledged shares come after recent fears of high exposure of mutual funds to companies with a high percentage of promoter shares pledged through complex structures.
The need for higher transparency on pledged shares come after recent fears of high exposure of mutual funds to companies with a high percentage of promoter shares pledged through complex structures.
Source: Business Standard
