Mumbai, May 20 -- The Securities and Exchange Board of India (Sebi) on Wednesday allowed Franklin Templeton India to list units of its shuttered schemes on stock exchanges, hoping to provide an alternative exit option for investors currently locked out of their money.

In a circular, the regulator said that the units shall be listed on stock exchanges and investors can exit through this mechanism. The change in rule will also apply to all mutual funds winding up their schemes in future under Sebi regulations.

"There are several steps envisaged with respect to winding up of mutual fund schemes before the scheme ceases to exist," a Sebi circular said. During this process, such units shall be listed and traded on a recognized stock exchange...