SEBI seeks dividend compliance report from MFs by June 17
Market regulator SEBI has asked mutual fund houses to submit reports, pertaining to compliance with a recent rule that dividends be paid only from realised gains and not premium income, by June 17.
“SEBI has directed mutual funds to pay dividends only from realised gains and asked them to submit a compliance report on the same by June 17,” sources in the fund houses said.
Fund houses, which used to dole out handsome dividends to attract new investors, are now concerned that the move will lessen investors’ interest in MFs.
Currently, if an investor buys a unit at its net asset value of Rs 100 by paying a premium of Rs 90 over the face value of Rs 10, dividends would be paid from the premium amount of Rs 90.
This practice is tantamount to paying back unit-holders from their own money.
Written by admin on July 5th, 2010 with no comments.
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