MFs to provide ASBA for NFOs before October

By SiliconIndia   |   Thursday, July 29, 2010
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Mumbai: In order to protect the interest of investors in securities, the market regulator Sebi has extended the deadline for mutual funds (MFs) to provide the Application Supported by Blocked Amount (ASBA) facility to new fund offers (NFOs) to October 1. Sebi had made it compulsory for MFs to extend ASBA facility for all NFOs from July 1, earlier in March. Under ASBA, which is currently in place for all participants in the Indian capital market, deposits of applicants remain in their accounts till the shares are allotted. Extending the deadline will enable investors to save interest cost of borrowing. It will also help companies avoid the hassles associated with refunds. "The move will protect the interest of investors in securities and promote the development and better regulation of the securities market", said Sebi. However, according to experts, since mutual funds get most subscription in last days of its closing, the move will not have much implication for the market.
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