Why Franklin-type fiasco will keep repeating

What went wrong? Is there a systemic flaw? Is there a role for the regulator here? Can this happen again? What should you do to avoid such accidents?

Franklin Templeton India Mutual Fund last week suddenly announced it was winding up six debt schemes that held more than Rs 27,000 crore. These are Low Duration Fund, Dynamic Accrual Fund, Credit Risk Fund, Short Term Income Plan, Ultra Short Bond Fund, and Income Opportunities Fund. 
 

Franklin will neither accept fresh subscriptions, nor allow exit. It will liquidate the portfolio as and when the debt papers mature, or earlier if it can sell. Whatever it collects, it will return to investors. How much will that be? No one knows. Investors are trapped. Those who had put in money in other