After Franklin fiasco, unlisted debt securities come under Sebi scrutiny

Industry estimates suggest Rs 5,700 crore exposed to such papers

Franklin Templeton Mutual Fund’ s (MF’s) move to wind up six of its debt schemes has put the spotlight on unlisted debt securities held by MF schemes. The Securities and Exchange Board of India (Sebi) has noted that some schemes were yet to rebalance portfolios to reduce riskier exposure, despite enough time given to the MF industry.

Excluding Franklin’s debt schemes, the industry data for available disclosures shows some MF schemes still hold over Rs 5,700 crore exposure to unlisted or privately-placed debt securities, with certain schemes holding over half the assets in such papers.