Prof. Jayanth R. Varma’s Financial Markets Blog

A blog on financial markets and their regulation

CNBC Interview on Mutual Funds

I was interviewed on CNBC last week for their show The Firm on recent changes made by the Securities and Exchange Board of India (SEBI) in mutual fund regulations. SEBI tightened the norms relating to exposure of a mutual fund to a single issuer or industry. One of the issues that came up was whether the norms should be more generous for AAA rated debt. I referred to the subprime crisis where the losses came in AAA rated mortgage securities and argued that AAA debt is in some ways more dangerous because you do not even get a high coupon to compensate for the default losses. I have tweeted about this in the past quoting Asness: “the most dangerous things are those that you think protect you, but only mostly protect you”

There was also a discussion on the issue of gates and sidepockets that I have blogged about and tweeted about. I continued to maintain that fund managers have the responsibility to ensure that redemption does not take place at NAVs different from the realizable value of the underlying assets.


One response to “CNBC Interview on Mutual Funds

  1. vatsal vora March 29, 2016 at 11:53 am

    sir, I am a basic graduate,

    I want to start learning about stock markets and finance
    what should be my basic learnings to get knowledge abt practical stock markets and financial aspects?

    which books , cases to learn?
    will be appriciating your reply:).thanks sir:)

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