Maturity period fixed for liquid schemes

Experts say the changes might bring cheers to savvy investors who park their extra cash in liquid fund schemes. The October 2008 turbulence had caused huge redemptions as a large number of corporates,faced with a credit crunch and in need of working capital,exited fixed maturity plans,liquid and liquid-plus funds. Fund houses were rolling over their payment obligations to corporate houses. In some cases,some schemes which were supposed to mature in 180 days rolled over for 200 or 250 days,which isnt the best thing to happen, said Value Research CEO Dhirendra Kumar.

In another order,Sebi said that the indicative portfolio and yield might be misleading to the investors. No communication regarding the same in any manner whatsoever,shall be issued by any mutual fund or distributors of its products, said Sebi. It is an obvious move as it is against the spirit of law for a MF house to provide indicative portfolio in conjunction to the yield. How can a fund house talk about its portfolio even before raising the sum? said Kumar.

Sebi further said inter-scheme transfers of securities having maturity up to 365 days and held in other schemes as on February 01,2009 will be permitted till October 31,2009.