TMI BlogSecurities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 1999.X X X X Extracts X X X X X X X X Extracts X X X X ..... 999. 2. They shall come into force on the date of their publication in the Official Gazette. II. In the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, (hereinafter referred to as the said regulations),- 1. In regulation 2, for clause (y) the following clause be substituted, namely; (y) Trustees mean the Board of Trustees or the Trustee Company who hold the property of the Mutual Fund in trust for the benefit of the unitholders. 2. In regulation 18, (a) for sub-regulation (11), the following sub-regulation shall be substituted, namely; (11) Each trustee shall file the details of his transactions of dealing in securities with the Mutual Fund on a quarterly basis, (b) in sub-regulatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f such persons, (iv) The trustee shall ensure that all service providers are holding appropriate registrations from the Board or concerned regulatory authority. (v) The Trustees shall arrange for test checks of service contracts. (vi) Trustees shall immediately report to Board of any special developments in the mutual fund. B. Specific Due Diligence: The Trustees shall: (i) obtain internal audit reports at regular intervals from independent auditors appointed by the Trustees. (ii) obtain compliance certificates at regular intervals from the asset management company. (iii) hold meeting of trustees more frequently. (iv) consider the reports of the independent auditor and compliance reports of ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eness of fees paid to sponsors, asset management company and any others for services provided. (viii) principal underwriting contracts and their renewals. (ix) any service contract with the associates of the asset management company. 2. In Regulation 21, in sub-regulation (1), in clause (f), for the existing explanation, the following explanation shall be substituted, namely: Explanation : For the purposes of this clause, net worth means the aggregate of the paid up capital and free reserves of the asset management company after deducting therefrom miscellaneous expenditure to the extent not written off or adjusted or deferred revenue expenditure, intangible assets and accumulated losses. 3. In Regulation 22, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment basis where the sponsor or its associate companies have acted as arranger or manager. 6. In regulation 45, a proviso shall be added, namely;- Provided that mutual funds shall enter into derivatives transactions in a recognized stock exchange for the purpose of hedging and portfolio balancing, in accordance with the guidelines issued by the Board. 7. In the Third Schedule, after clause 19, the following clauses 20, 21 and 22 shall be inserted, namely: 20. The trust deed shall state that a meeting of the trustees shall be held at least once in every three months and at least four such meetings shall be held in every year. 21. The trust deed shall specify the quorum for a meeting of the trustees. Provided th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sement reproducing or purporting to reproduce any information contained in a offer document shall reproduce such information in full and disclose all relevant facts and not be restricted to select extracts relating to that item which could be misleading. 4B. No celebrities shall form part of the advertisement. 10. In the Seventh Schedule, (i) for the existing clause 1, the following clauses 1 and 1A, shall be substituted, namely: 1. A mutual fund scheme shall not invest more than 15% of its NAV in debt instruments issued by a single issuer which are rated not below investment grade by a credit rating agency authorised to carry out such activity under the Act. Such investment limit may be extended to 20% of the NAV of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the equity shares or equity related investments in case of open ended scheme and 10% of its NAV in case of close ended scheme . [F.No. SEBI/LE/21876/99] D.R. MEHTA, Chairman Foot Note: (1) The principal regulation, SEBI (Mutual Funds) Regulations, 1996, was issued under S.O. No. 856(E), dated December 6, 1996 published in the Gazette of India, Part II, Section 3(ii), dated December 9, 1996. (2) SEBI (Mutual Funds) Regulations, 1996 was subsequently amended by the SEBI (Mutual Funds) (Amendment) Regulations, 1997, issued under S.O. NO. 327 (E), published in Gazette of India dated April 15, 1997. (3) SEBI (Mutual Funds) Regulations, 1996 was subsequently amended by the SEBI (Mutual Funds) (Amendment) Regulations, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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