What if an AMC closes down ?

#1
Hello experts,

Before starting investments in mutual funds, just want to make sure how secure will be my money with AMCs.

I am wondering what happens to the investors money, if an AMC closed down.
I think, in the past many AMCs were closed in India. What happened to the investors money in such cases ?

Thanks,
Gouri
 
#2
Hi Gouri,

It depends on which AMC are you talking about. In reality, this is a very possible scenario, but there are checks and balances in any economic and financial system. Though I am not an expert on the same nor do I belong to the sector, I can share my thoughts about the same.

Typically, an AMC just can't go bust. It's a slightly theoritical possibility. If the same happens, then a larger AMC (One of the established fund houses with solid banking background like HDFC, SBI, Franklin templeton) will pitch in and take over or a government owned entity like LIC will pump in. LIC is pretty rich in funds and will definitely be able to fund if anything like this happens.

Hope this answers your query !!! I am interested in knowing why this thought crossed your mind.

Happy Investing !!
 

rvm123

Active Member
#3
AMC may not close down. It may be taken over by someone else. Kothari Pioneer was taken over / changed as Franklin Templeton; Chola was taken over by L&T; like this the management may change.
 

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