Franklin Templeton's Debt Fund Imbroglio: What it Means for Investor and Industry? I The Wire
- 3 years ago
In a shock move on Thursday, Franklin Templeton announced the winding down of six of its debt funds that had credit risk. The shutdown kicked in from Friday (April 24).
This is an unprecedented move, one doesn’t recall this happening even post the Global Financial Crisis. The last time a scheme was wound down was when market regulator SEBI asked Sahara Mutual Fund to wind up all its schemes in 2018, albeit for very different reasons.
Before anything else, to clarify, if you hold any of these funds, as has been explained, there will be no purchases and redemptions made in these funds post-the cut-off time.
So, if you are an existing investor in any of these funds, this means that you can no longer redeem your money and your investment is locked in these funds, until the fund house makes further payments. Simply put, your money stands locked. You cannot access it.
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This is an unprecedented move, one doesn’t recall this happening even post the Global Financial Crisis. The last time a scheme was wound down was when market regulator SEBI asked Sahara Mutual Fund to wind up all its schemes in 2018, albeit for very different reasons.
Before anything else, to clarify, if you hold any of these funds, as has been explained, there will be no purchases and redemptions made in these funds post-the cut-off time.
So, if you are an existing investor in any of these funds, this means that you can no longer redeem your money and your investment is locked in these funds, until the fund house makes further payments. Simply put, your money stands locked. You cannot access it.
Like our work? Click here to support The Wire: https://thewire.in/support
The founding premise of The Wire is this: if good journalism is to survive and thrive, it can only do so by being both editorially and financially independent. This means relying principally on contributions from readers and concerned citizens who have no interest other than to sustain a space for quality journalism. As a publication, The Wire will be firmly committed to the public interest and democratic values.
We publish in four different languages!
For English, visit www.thewire.in
for Hindi: http://thewirehindi.com/
for Urdu: http://thewireurdu.com
for Marathi: https://marathi.thewire.in
If you are a young writer or a creator, you can submit articles, essays, photos, poetry – anything that’s straight out of your imagination – to LiveWire, The Wire’s portal for the young, by the young. https://livewire.thewire.in/
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