Franklin Templeton Shifts Distributor Commissions to Investors in 6 Suspended Debt Schemes
Franklin Templeton has transferred ₹78 crore of distributor commission accrued in the six suspended debt programs to investors in line with guidelines from the market regulator Securities and Exchange Board of India (SEBI).
The commission from distributors between April 24, 2020 and March 17, 2021 was transferred to the official liquidator appointed by the Supreme Court, SBI Funds Management, and added the regular plan net asset value of these debt systems on Thursday, because the direct plans do not charge any distributor. commission, sources said.
Franklin Templeton had accrued the distribution commission between the plans’ April 24, 2020 suspension and the Supreme Court’s appointment of the official liquidator last March, sources said.
Distributors called the decision by the mutual fund company and SEBI to transfer money to investors unfair and unethical.
Requesting anonymity, one of the Pune-based distributors said that all the distributors did was to advise and help investors invest their money in these systems for a well-defined commission approved by the regulator and if the system had not worked, how can the distributors be held responsible.
“Can a car manufacturer be held responsible and punished for a road accident? he wonders.
Suspension of debt regimes
Franklin Templeton has faced anger from investors after suddenly suspending redemption and new investment in six debt programs amid a huge liquidity crunch in the debt market following the first Covid outbreak in 2020.
Investors had a moment of anxiety as the abrupt shutdown of a mutual fund was carried out for the first time and they feared losing their entire investment of ₹25,251 crore.
On the contrary, the fund house had returned ₹26,098 crore in eight tranches till last December by liquidating the investments held in these schemes. Investors had earned 103% of the AUM as of April 23, 2020. Interestingly, five out of six plans had returned 100% of investors’ money, while Franklin Templeton’s short-term income plan returned 96%.
The plans still have investments in two bonds that mature in 2023 and two separate investments in Vodafone Idea and YES Bank.
March 25, 2022