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Saturday, Jun 29, 2002

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Money & Banking - Govt Bonds

MFs must enter into G-sec deals in demat only

K.R. Srivats

NEW DELHI, June 28

THE Securities and Exchange Board of India (SEBI) has now stipulated that all mutual funds should enter into transactions relating to Government securities in the dematerialised form only.

The mutual funds regulations of the capital market regulator already stipulate that the mutual funds having an aggregate of securities worth Rs 10 crore or more would be required to settle their transactions only through dematerialised securities.

A circular issued by SEBI also said that mutual funds should distribute the amounts realised, within two years of the winding up of the scheme, from non-performing assets (NPAs) and illiquid securities to the old investors.

This would be applicable in cases where investments made by mutual funds may become NPAs or illiquid at the time of maturity/closure of schemes and the amounts may be realised after the winding-up of the scheme.

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