Securities and Exchange Board of India to tighten norms for FMPs
In a significant development, market regulator Sebi, or Securities and Exchange Board of India, has decided to tighten norms for FMPs, or fixed maturity plans, and has put all fresh offer documents that allow an exit option on hold.
Sebi has decided to put all fresh FMP offer documents that allow an exit option on hold and will relook at FMP norms. It will also look at disclosures and need for sectoral limits. The regulator will look at exit clauses on FMPs and wants tougher exit clauses. Sebi also said it will discuss the issue with the industry once the immediate liquidity concerns subside.
Meanwhile, the AMFI, or Association of Mutual Funds in India, Chairman said the industry recognises the concerns and that it will work with the regulator to avoid any future crises and Liquidity pressure on mutual funds was easing.