Fixed Maturity Plans: Indicative yields are not a bad idea
SEBI has banned FMPs from giving indicative yields. It should re-examine the fiat
Market regulator Securities and Exchange Board of India (SEBI) has said that neither a fund house nor a distributor can give ‘indicative’ returns on fixed maturity plans (FMPs). This is a strange order and merits deeper examination.
In the old days, there used to be something called ‘inter-corporate’ loans—one company would lend to another. The lender would take on the risk of various borrowers directly. FMP has become a vehicle that replaces the inter-corporate loan with added features. In...
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