HDFC mutual fund announces country’s first defence fund

 

HDFC mutual fund announces country’s first defence fund

What is the news :

• HDFC Mutual Fund has filed a scheme information document (SID) with SEBI to come up with India’s first Defence Fund. Called the HDFC Defence Fund
• It will be an open-ended equity scheme that will be investing in defence & allied sector companies.

Objective :

• Prime Objective of the scheme is to provide long-term capital appreciation by investing predominantly in equity and equity related securities of Defence & allied sector companies.
• Allied sectors include Aerospace, Explosives, Ship Building, industries /stocks present on SIDM (Society of Indian Defence Manufacturers) list or any other similar industries / stocks allied  to the Defence sector.

About the scheme :

• The Scheme offered being an open-ended scheme will offer Units for Sale / Switch-in and Redemption / Switch-out on every Business Day at NAV based prices when the Scheme re-opens for ongoing transactions (after the NFO).
• As per SEBI (MF) Regulations, the Mutual Fund shall despatch redemption proceeds within 10 Business Days from the date of redemption.
• A penal interest of 15% or such other rate as may be prescribed by SEBI from time to time, will be paid by the AMC in case the redemption proceeds are not dispatched within 10 Business Days from the date of redemption.
• However, under normal circumstances, the Mutual Fund would endeavour to pay the redemption proceeds within 3-4 Business Days (as applicable) from the date of redemption,” said the draft paper.
• The Minimum Application Amount During NFO Period Purchase will be Rs 5,000 and any amount thereafter.
• During continuous offer period (after scheme re-opens for repurchase and sale) Purchase will be Rs 5,000 and any amount thereafter. Additional Purchase will be Rs 1,000 and any amount thereafter.

About HDFC bank:

• Chairman -Atanu Chakraborty
• CEO -Sashidhar Jagdishan
• Founded – 1994 August
• Headquarter – Mumbai.

About SEBI:

• The Securities and Exchange Board of India (SEBI) is the regulatory body for securities and commodity market in Indiaunder the ownership of Ministry of Finance , Government of India
• It was established on 12 April 1988 and given Statutory Powers on 30 January 1992 through the SEBI Act, 1992
• Headquarters – Mumbai
• Chairman – Madhabi Puri Buch ( recently appointed)

Functions of SEBI:

The main primary three functions are-

• Protective Function
• Regulatory Function
• Development Function

1. Protective Functions

As the name suggests, these functions are performed by SEBI to protect the interest of investors and other financial participants.

It includes-

• Checking price rigging
• Prevent insider trading
• Promote fair practices
• Create awareness among investors
• Prohibit fraudulent and unfair trade practices

2. Regulatory Functions

These functions are basically performed to keep a check on the functioning of the business in the financial markets.

These functions include-

• Designing guidelines and code of conduct for the proper functioning of financial intermediaries and corporate.
• Regulation of takeover of companies
• Conducting inquiries and audit of exchanges
• Registration of brokers, sub-brokers, merchant bankers etc.
• Levying of fees
• Performing and exercising powers
• Register and regulate credit rating agency

3. Development Functions

This regulatory authority performs certain development functions also that include but they are not limited to-

• Imparting training to intermediaries
• Promotion of fair trading and reduction of malpractices
• Carry out research work
• Encouraging self-regulating organizations
• Buy-sell mutual funds directly from AMC through a broker

Objectives of SEBI:

• The objectives of the Stock Exchange Board of India are:

1. Protection to the investors

The primary objective of SEBI is to protect the interest of people in the stock market and provide a healthy environment for them.

2. Prevention of malpractices

This was the reason why SEBI was formed. Among the main objectives, preventing malpractices is one of them.

3. Fair and proper functioning

SEBI is responsible for the orderly functioning of the capital markets and keeps a close check over the activities of the financial intermediaries such as brokers, sub-brokers, etc.

Recent news related to HDFC bank (Important)

RBI lifts all restrictions on HDFC Bank’s new digital launches

• The Reserve Bank of India (RBI) has lifted the restrictions imposed on HDFC Bank regarding its business generating activities planned under the Digital 2.0 programme
• In December 2020, RBIhad directed HDFC Bank to temporarily halt all digital launches as well as new sourcing of credit card customers, following various outages the bank faced due to technical glitches in the past two years. The RBI action came after the bank’s customers faced a number of incidents of outages in internet banking, mobile banking, and payment utilities of the bank over the past two years.
• Last year, in August, RBI had partially lifted the ban on HDFC Bankby allowing it to issue new credit cards but had continued the embargo on its digital activities planned under Digital 2.0 programme.