Coimbatore Stock Exchange Derecognized.
The Securities and Exchange Board of India (Sebi) has increased the MF borrowing limit to 40 per cent without any publicity. Earlier, the borrowing limit was 20 per cent of net assets of the schemes. The move would prove beneficial for mutual fund industry which is under huge pressure due to global financial crisis. Mutual funds suffered a huge loss in their assets under management (AUM) during the year. SEBI said in a statement, "In order that the limit for borrowing does not lead to a situation where mutual funds are not able to meet the redemption requests and inhibit orderly redemptions, had enhanced the MF borrowing limit from 20 per cent of net assets of the schemes to 40 per cent of net assets for six months period. This was only for the purpose of redemptions and not for payment of interest or dividend." The regulator termed it as a temporary measure to save the interests of mutual fund industry.
15 mutual fund houses availed the increased limit as of November 10, 2008. The body may allow companies listed with de-recognized regional stock exchanges (RSEs) to seek listing or to provide an exit option to investors. RSE will not allowed to use the word "stock exchange" after de-recognition. Hyderabad, Rajkot, Magadh and Coimbatore Stock Exchange have already been derecognized.
