Sebi has come out with the guidelines for the fund. The fund will act as a backstop facility for purchase of investment-grade corporate debt securities, to instil confidence among the participants in the corporate debt market during times of stress.
It would also enhance secondary market liquidity by creating a permanent institutional framework for activation in times of market stress.
The fees and expenses of the Fund shall be as follows:
• During Normal times: (0.15% + tax) of the Portfolio Value charged on daily pro-rata basis.
• During Market stress: (0.20% + tax) of the Portfolio Value charged on daily pro-rata basis.
• “Portfolio Value” means the aggregate amount of portfolio of investments including cash balance without netting off of leverage undertaken by the Fund.
CDMDF would be launched as a close ended scheme with an initial tenure of 15 years from the date of its initial closing. The units of CDMDF can be subscribed by asset management companies (AMCs) and specified debt-oriented mutual fund schemes, excluding overnight funds, gilt funds and conservative hybrid funds.
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