Short Term Bank Deposits: SEBI Gave Clarity On Mutual Fund Investment
SEBI(Securities and Exchange Board of India)gave an announcement not to invest in the banks where a scheme has parked funds in the lender’s short-term deposits. Behind the announcement is, the market watchdog has issued a clarification on the Short-term deposits of parking Funds which was scheduled for commercial banks by Mutual funds-Pending Deployment.
“Trustees/asset management companies gave elucidation that no funds of a scheme are parked in STD (short-term deposit) of a bank which has been invested in that scheme,” SEBI said in a circular on Friday. Moreover, trustees and AMC’s gave clarity on banks in which a scheme has STD do not invest in the same scheme until the scheme has std with such banks.
As per regulations, a mutual fund may invest funds in short-term deposits of scheduled commercial banks, subject to certain conditions.
Disclaimer: This post is just information about the scheme. It does not give any advice or recommendation. Mutual Fund investments are subject to market risk. Please read the offer document carefully before investing.