The decision to relax
the investment limit for HFCs was taken by SEBI at its board meeting held in
October, 2012.
SEBI said in a circular,
“... In light of the important role played by HFCs in the housing sector, it
has been decided that an additional exposure not exceeding 10% of net assets of
the scheme shall be allowed only to HFCs as part of financial services sector
for prudential limits in debtoriented schemes,”
The total investment
in HFCs shall not exceed 30% of the net assets of the scheme.
SEBI said the
relaxation would be subject to certain conditions such as that the securities
issued by HFCs were rated AA or / above.
Also, HFCs should have been registered with the NHB (National Housing Bank).
In October, 2012 SEBI had said the decision to relax
investment limit was taken after taking into consideration the important role
played by HFCs in fulfilling the social objective of increased house ownership
and supporting the economy by creating demand for construction of new houses.
Certain debt mutual
fund schemes, such as long-term FMP preferred route for the NBFC( Non - Banking
Finance Company) sector to raise medium to long term funds at attractive rates.
PTI
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