The document summarizes recent news in the mutual fund industry: - SEBI has proposed bringing mutual fund unit transactions under insider trading rules in the wake of the Franklin Templeton crisis. - WhiteOak Capital Mutual Fund launched its first scheme, the WhiteOak Capital Flexi Cap Fund. - Paytm Money is migrating direct mutual fund investors to the BSE StAR platform for transactions instead of using its own platform.

1. Weekly
News
11th July 2022
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SEBI Registered Investment Adviser (INA200006628)

2. Snapshot
Insider Trading Rules
May Apply To Mutual
Fund Trades
Paytm Money Moves
Direct Mutual Fund
Investors To BSE Star
Exchange
LIC Mutual Fund Plans
To Absorb IDBI Mutual
Fund
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© RightFocus Investments Pvt. Ltd.
SEBI Registered Investment Adviser (INA200006628)
WhiteOak Capital Mutual Fund
Launches Its First Scheme,
WhiteOak Capital Flexi Cap Fund

3. Snapshot
Supreme Court Stop
Payments In Franklin
MF Case Until
Distributor Commission
Issue Is Resolved
New Rules To Secure
Online Mutual Fund
Transactions
Crypto Crash
Continues: Ethereum,
2nd Largest Digital
Currency, Loses 20%
Value in 24 Hours
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SEBI Registered Investment Adviser (INA200006628)

4. Insider trading rules may apply to mutual fund trades
 Market regulator SEBI has proposed to bring in buying and selling of
mutual fund units under insider trading rules.
 Currently, these are specifically excluded from the Prohibition of Insider
Trading (PIT) regulations.
 Sebi's move comes in the wake of the Franklin Templeton crisis of 2020, where
senior executives - including FT's Asia Pacific head Vivek Kudva - and their
immediate relatives indulged in unfair trade practices such as withdrawing
some of their investments ahead of the six debt schemes shutting for
redemptions on April 23.
 Sebi has also proposed to make it mandatory to report all the trades of mutual
fund units executed by the designated persons of asset management company
(AMC), their immediate relatives and by any other person for whom such person
takes trading decisions, to the compliance officer of AMC.
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SEBI Registered Investment Adviser (INA200006628)

5. WhiteOak Capital Mutual Fund launches its first scheme,
WhiteOak Capital Flexi Cap Fund
 This is an open-ended dynamic equity scheme investing across large, mid, and
large, mid, and small-cap stocks.
 The NFO opens on July 12 and closes on July 26.
 WhiteOak’s equity NFO will have a balanced portfolio comprising both cyclical and
comprising both cyclical and counter-cyclical sectors that aims to outperform
aims to outperform across various market cycles.
 The minimum investment that can be made in the fund is Rs 500 and thereafter in
and thereafter in multiples of Rs 1. The exit load is 1% on the NAV is only

6. Paytm Money moves direct mutual fund investors to BSE
star exchange
 Paytm Money, one of the country’s largest direct investing
platforms for mutual funds, has started migrating customers to
its broking business.
 Instead of using their own platform for direct transactions,
Paytm money will migrate to the BSE StAR exchange platform and
the transactions will use Paytm’s broking code instead of RIA
Code.
 The fintech had sent an email to customers asking them to
© RightFocus

7. LIC Mutual Fund plans to absorb IDBI Mutual Fund
 LIC Mutual Fund has started the process of absorbing IDBI Mutual Fund to fulfill
Mutual Fund to fulfill regulatory norms after two attempts to find a buyer for IDBI
to find a buyer for IDBI NSE Mutual Fund failed.
 IDBI Bank-promoted IDBI MF had to be either sold or merged with LIC MF
with LIC MF because, under Sebi rules, one promoter cannot have more than
have more than 10% stake in two mutual funds
 Valuations have been completed and both sides will approach the Securities and
the Securities and Exchange Board of India later this month to start the process.
to start the process. The merger is expected to be completed this quarter.

8. Supreme Court Stop Payments In Franklin MF Case
Until Distributor Commission Issue Is Resolved
 The Supreme Court of India, on April 12, directed SBI Mutual Fund to temporarily
Fund to temporarily pause the next tranche of payment to investors of six Franklin
investors of six Franklin Templeton Debt Mutual Funds after the Foundation of
the Foundation of Independent Financial Advisors (FIIA), a non-profit
non-profit organization, filed an application in court seeking payment of distributor
seeking payment of distributor commissions.
 In April 2020, Franklin Templeton India had decided to close six of its debt mutual
six of its debt mutual fund schemes. The reasons given were liquidity drying up in
liquidity drying up in the bond market and higher redemption pressure from
pressure from investors.

9.  The mutual fund distributors and others who had sold these schemes to clients
schemes to clients were eligible for commission but which they did not receive.
they did not receive.
 The Supreme Court observed that the distribution commission of the six schemes
of the six schemes of Franklin Templeton Mutual Fund was accrued in favour of

10.  The apex court has issued a notice and directed the Securities and Exchange
Securities and Exchange Board of India (Sebi) to file its response in this regard. It
response in this regard. It also observed that since the exact amount of
exact amount of distribution commission is yet to be decided, no further
decided, no further disbursement of funds regarding the same shall take place
shall take place without prior permission of the Court.
 Source material : https://www.outlookindia.com/business/supreme-court-stop-
https://www.outlookindia.com/business/supreme-court-stop-payments-in-franklin-
payments-in-franklin-mf-case-until-distributor-commission-issue-is-resolved-
issue-is-resolved-news-191678

11. New rules to secure online mutual fund transactions
 Sebi has decided to discontinue usage of pool accounts for transactions in mutual
transactions in mutual funds by online platforms, stockbrokers or distributors and
stockbrokers or distributors and there is the need for a two-factor authentication to
two-factor authentication to complete a transaction
 Payments made by an investor for purchasing units of a scheme should go
scheme should go directly to the fund house and the sale proceeds should go
proceeds should go directly to an investor's account. This is to ensure that money
is to ensure that money is not misused.
Systematic investment plan (SIP):
Many stock brokers who also distribute mutual funds have taken a mandate from
taken a mandate from investors, using which money comes to the pool account and

12.  Investors need to create a new mandate through their broker in favour of Clearing

13.  Switch transactions: Some platforms offered inter AMC switch transactions,
transactions, where an investor could switch from a mutual fund scheme of one
fund scheme of one fund house to another fund house. Here, money would come
money would come into the pool account of the broker and would be pushed to
would be pushed to the second fund house immediately.
 With pool accounts not to be used for mutual funds, redemption money will now
redemption money will now directly come to the investor's bank account, and he
bank account, and he will have to redeploy it again through another transaction.
another transaction.
 STPs and SWP: Some stockbrokers and online platforms will temporarily

14.  Redemption transactions: As the regulator has made it mandatory to verify all
mandatory to verify all digital transactions using 2 FA (factor authentication), it is
(factor authentication), it is important for investors to verify and update their
verify and update their mobile number and email ID with the RTA. In case this is
RTA. In case this is not done, redemption transactions may not go through.
not go through.
 When units in mutual funds are sold, there will be an authentication code sent to
authentication code sent to investors on the mobile number and email id which is
and email id which is recorded in the RTA database. Only when the investor keys
when the investor keys in this OTP, the transaction is authenticated. This is
authenticated. This is essential as there are discrepancies in investor contact

15.  Redemption transactions: As the regulator has made it
mandatory to verify all digital transactions using 2 FA
(factor authentication), it is important for investors to
verify and update their mobile number and email ID with the
RTA. In case this is not done, redemption transactions may
not go through.
 When units in mutual funds are sold, there will be an
authentication code sent to investors on the mobile number
and email id which is recorded in the RTA database. Only
when the investor keys in this OTP, the transaction is
authenticated. This is essential as there are discrepancies
in investor contact details with RTA as they were recorded

16. Crypto Crash Continues: Ethereum, 2nd Largest Digital
Currency, Loses 20% Value in 24 Hours
 Ethereum, the world’s second largest cryptocurrency after Bitcoin, has joined the
Bitcoin, has joined the cryptocurrency crash – plummeting in value by 20 per cent
value by 20 per cent over the last 24 hours. Cryptocurrencies have sharply
Cryptocurrencies have sharply declined in value during the past few days as fears
past few days as fears for the global economy spread, triggering investors to sell
triggering investors to sell off risky assets .
 Bitcoin has shed a third of its value since January and Luna with 98 per cent of its
with 98 per cent of its value wiped out overnight with suicide hotlines pinned to
suicide hotlines pinned to the currency’s Reddit page as a result.
result.

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