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Here’s what Karnataka HC verdict on Franklin Templeton means

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Two months after the Karnataka High Court began hearing arguments in the Franklin Templeton case, it has released a temporary judgment that finds no wrong doing on the part of the trustees with respect to the decision to wind up six schemes. But it does say that unit holders consent should have been sought.

Two months after the Karnataka High Court began hearing arguments in the Franklin Templeton case, it has released a temporary judgment that finds no wrong doing on the part of the trustees with respect to the decision to wind up six schemes. But it does say that unit holders consent should have been sought.
Sandeep Parekh, Founder of Finsec Law Advisors is of the view that everything is based around the interpretation of two regulations which unclear in terms of whether you need prior approval of unit holders or not.
“The High Court has said that indeed it requires prior approval if unit holders if you want to wind up a scheme in a premature manner so given that interpretation I think everything they have done till now will be subject to unit holders approving that process,” Parekh said.
According to Parekh market regulator Securities & Exchange (SEBI) should redo the entire process in its regulation so at least going forward there is clarity in for both the unit holders and mutual fund how to process these kind of situations.
Watch video, to know more.

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