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MFs may no longer be preferred source of capital for firms, NBFCs

Mutual funds may lose their attractiveness as a preferred source of capital for corporates and NBFCs as SEBI announced new rules aimed at protecting investors in liquid and debt funds from credit risks. Starting September 2020, fund houses will be allowed to invest only in listed non-convertible debentures (NCDs) and commercial papers (CPs). SEBI has decided to increase the minimum security cover ratio of credit enhanced securities or structured obligations that also include loan against shares (LAS) to four times from prevalent industry standards of 2:1.

Read More at Livemint News date : 1 Jul 2019, Monday

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