Parking of Funds in Short Term Deposits prohibited where the bank invests in the same mutual fund scheme; trustees must prevent conflicts. Mutual funds must not park scheme funds in short term deposits of a scheduled commercial bank that has invested in that scheme; Trustees and AMCs must ensure no scheme's funds are placed in an STD of any bank that is itself an investor in the same scheme. Conversely, a bank holding a scheme's STD shall not invest in that scheme until the STD with that bank has been withdrawn. These requirements are obligations on Trustees/AMCs to prevent conflicts of interest and ensure investor protection.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Parking of Funds in Short Term Deposits prohibited where the bank invests in the same mutual fund scheme; trustees must prevent conflicts.
Mutual funds must not park scheme funds in short term deposits of a scheduled commercial bank that has invested in that scheme; Trustees and AMCs must ensure no scheme's funds are placed in an STD of any bank that is itself an investor in the same scheme. Conversely, a bank holding a scheme's STD shall not invest in that scheme until the STD with that bank has been withdrawn. These requirements are obligations on Trustees/AMCs to prevent conflicts of interest and ensure investor protection.
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