[ad_1]
MUMBAI: Franklin Templeton India issued an apology to the Securities and Exchange Board of India (Sebi) “for any unintentional slights caused to the regulator.” The market regulator was upset by the comment from Franklin Templeton’s global president, Jennifer M Johnson, that regulatory guidelines were one of the reasons that led to the closure of her six debt schemes in India.
Late on Thursday, Sebi released a statement stating that Franklin Templeton should focus on repaying investors’ money and that some funds have been at high risk of concentration. To clarify, Franklin Templeton, in a newspaper ad on Friday, said Johnson’s remarks were taken out of context.
On April 23, Franklin Templeton India had liquidated six of its debt schemes due to illiquidity and rescue pressures amid the covid-19 outages. However, Johnson, in Franklin Templeton’s second-quarter earnings call on May 1, blamed Sebi’s rule for the episode. The transcript of the call was made public on May 6.
She said Sebi’s regulation of October 2019 had restricted the investment of funds in unlisted instruments by less than 10%. The funds received nearly a year to bring their investment in unlisted bonds to prescribed levels.
“You can’t have more than 10% in a fund and you can’t exchange them. So about a third of our funds were orphaned there,” Johnson said.
Sebi, in his statement, said that some fund schemes have had a high risk of concentration, even when they were given enough time to cut investments in unlisted bonds to 10%.
“Although regulations are clear, some mutual fund schemes appear to have chosen to have high concentrations of bespoke, opaque, opaque, high-risk structured debt securities with low credit ratings and appear to have chosen not to rebalance their portfolios, even during the 12 months available to them so far, “he said.
Today, Franklin Templeton said Johnson’s statements were taken out of context, which diluted the essence of his responses.
“The reference to regulations on unlisted securities was intended to be part of these background statements to provide context for an audience unfamiliar with Indian markets,” said Sanjay Sapre, President of India Franklin Templeton.
“We deeply regret any inadvertent snub that this may have caused to the esteemed Sebi office, whom we have always held in the highest esteem and unconditionally apologize for the same,” he added.
.
[ad_2]
