Valuation of Investments for FIs !

This is an extract from :Master Circular – Prudential norms for classification, valuation and operation of investment portfolio by FIs.- RBI

Link - http://rbidocs.rbi.org.in/rdocs/notification/PDFs/78419.pdf

The paragraph given below gives us the details of the exceptions of securities that would now be taken while calculating the HTM category. There seems to be some confusion out here in the case of the inclusion of Close Ended Mutual Funds. The paragraph says that close ended mutual funds which are traded on the stock exchange should be excluded while it looks like it should have been the other way around. I.e. close ended funds which are not listed on the stock exchange should have been excluded .

Is this observation valid???

4.3.1"In keeping with the international norms, only debt securities are to be classified under the HTM category. The only exceptions permitted (as detailed at para 4.3.4 below) are the equity held in the subsidiaries and joint ventures, investments in preference shares in the nature of advance, non project related redeemable shares and the investments in units of close ended schemes of mutual funds only if such units are listed on the stock exchanges (as listed units of close ended schemes can be sold off in the market at any point of time; which should therefore be placed in AFS or HFT category)."