Sundaram MF withdraws DHFL side-pocket, says not in-line with Sebi norms

Proposal was not in-line with Sebi norms on creating a separate portfolio for affected asset

Sundaram Mutual Fund’s (MF’s) proposal to side-pocket debentures of Dewan Housing Finance Corporation (DHFL) nearly 90 days after the ‘credit event’ had led to confusion among other fund houses, as the mechanism could not be invoked even a day after the credit event unless the regulator agreed to a one-time relaxation.

Sundaram MF, however, on Wednesday night issued a note to clarify that it won’t be going ahead with the move as it was not in line with the norms laid down by the Securities and Exchange Board of India (Sebi).

“Some fund houses have been asking Sebi to allow them one-time