Market Regulator changes the framework for LPCC
On Tuesday, the Securities and Exchange Board of India has continued to change its framework. This is regarding the enrichment of AMC for setting up limited purpose clearing corporation (LPCC) mutual funds.
According to the reports, in February, the regulator had introduced new guidelines to the AMCs whereas it could require to provide up of a restricted goal clearing corporation of MF.
Anyhow, the market regulator commanded that such contribution from AMCs needs to be in proportion to the average AUM of open-ended debt-oriented MF schemes managed by them for the financial year 2019-2020.
SEBI said the contribution of AMCs will continue to based on the average AUM of debt-oriented schemes for the financial year 2020-2021.
As of the source, the progress comes from the Association of Mutual Funds in India.
Limited Purposes Clearing Corporation (LPCC) remains an entity. The main purpose of this entity is to undertake the activity of clearing and settlement of repo transitions.
According to the source, the market experts believe that the LPCC entity may expect to support the mutual fund houses in tracking with redemption pressure. Moreover, it also helps settle transactions in corporate bond markets.