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Fund houses avoid side-pocketing to protect their pockets ahead of unit holders’

Updated : June 12, 2019 01:47 PM IST

After Dewan Housing Finance (DHFL) defaulted on its interest payments on June 4 and the subsequent downgrades by credit rating firms on June 5 - different fund houses chose different ways to deal with the crisis and stem the rot.
Tata Asset Management was the only fund house that segregated the bad asset (DHFL papers) under a rule called side-pocketing in MF industry parlance.
To ensure that fund houses do not misuse the side-pocketing rule and take additional risks, Sebi put down a number of conditions when it did allow segregation of bad assets.
Fund houses avoid side-pocketing to protect their pockets ahead of unit holders’
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