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Circular on Mutual Funds - SEBI - SEBI/HO/IMD/DF2/CIR/P/2021/024

Extract

..... mulative gross exposure limit for mutual fund schemes have been modified as under: “The cumulative gross exposure through equity, debt, derivative positions (including commodity and fixed income derivatives), repo transactions and credit default swaps in corporate debt securities, Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs), other permitted securities/assets and such other securities/assets as may be permitted by the Board from time to time should not exceed 100% of the net assets of the scheme.” (References: paragraph-3 of SEBI Circular No. Cir/ IMD/ DF/ 11/ 2010 dated August 18, 2010, paragraph-3(b) of SEBI Circular No. CIR/IMD/DF/19/2011 dated November 11, 2011, paragraph-2(d) of SEBI Circular No. CIR/IMD/DF/23/2012 dated November 15, 2012, paragraph-4(v) of SEBI Circular No. SEBI/HO/IMD/DF2/CIR/P/2019/65 dated May 21, 2019) 2. Investment Pattern 2.1. In partial modification to SEBI Circular No.IIMARP/MF/CIR/01/294/98 dated February 4, 1998, the portion on “Investment pattern” in paragraph-2(a)(ii) shall be read as under: “Investment pattern - The tentative portfolio break-up of Equity, Debt, Money Market Instrum .....

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Circular on Mutual Funds - SEBI

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..... rustees on the date of taking over). ii. Assumption of the trusteeship of the assets and liabilities of the schemes including outstanding borrowings, unclaimed dividends and unclaimed redemptions, if any. iii. Assuming all responsibilities and obligations relating to the investor grievances, if any, in respect of the schemes taken over, in accordance with and pursuant to MF Regulations and various circulars issued thereunder. 3.4. Disclosures to Unitholders While seeking the approval of the Board for change in the control of the AMC, the mutual fund handing over the control to another person, should also file the draft letter / email to be sent to the unitholders along with draft advertisement to be published in the newspaper. The draft letter / email to the unitholders should, inter-alia, include the following information - i. the activities of the new sponsor and its financial track record and performance as prescribed in the standard offer document; ii. In case of taking over of the schemes by an existing mutual fund registered with SEBI, the draft letter should also include the condensed financial information of all the schemes in the format prescribed in the standard offer doc .....

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Circular on Mutual Funds - SEBI

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..... ual Information Return to be filed by Mutual Funds” stands deleted. However, mutual funds shall continue to comply with the following: “Mutual funds are required to submit the Annual Information Return (AIR) under section 285 BA of the Income Tax Act, and various guidelines notified by Central Board of Direct Taxes (CBDT). As per this requirement, Trustees of Mutual Funds or such other person managing the affairs of the Mutual Funds (as may be duly authorized by the trustees in this behalf) have to report specified financial transactions through electronic medium to Income Tax Department giving PAN of the transacting parties in an Annual Information Return (AIR).” 6. Investment in securities by employees of AMC(s) and Trustees of Mutual Funds 6.1. In partial modification to SEBI Circular No. SEBI/HO/IMD/DF2/CIR/P/2016/124 dated November, 17, 2016: i. Paragraph A (2) (iv) shall be read as under: “In the name of parent, sibling or child of the employee or of the spouse of such employee, any of whom is either dependent financially on such employee or spouse of employee, or consults such employee or spouse of employee in taking decisions relating to trading in s .....

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Circular on Mutual Funds - SEBI

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..... herein investors have very short investment horizon, the performance can be advertised by simple annualisation of yields if a performance figure is available for at least 7 days, 15 days and 30 days provided it does not reflect an unrealistic or misleading picture of the performance or future performance of the scheme.” 7.2. In Partial modification to SEBI Circular No. Cir/IMD/DF/23/2017 dated March 15, 2017: 7.2.1. The following portion of paragraph A(4)(a) stands deleted : “3. When a scheme has been in existence for more than 1 year but less than 3 years or 5 years, the same shall be mentioned as a footnote in the performance advertisement of the Mutual Fund scheme.” 7.2.2. Paragraph A(4)(b) shall be read as under: “Where the scheme has been in existence for less than six months past performance shall not be provided. Further, if the scheme has been in existence for more than six months but less than one year, then simple annualized growth rate of the scheme for the past 6 months from the last day of month-end preceding the date of advertisement shall be provided.” 7.3. In partial modification of SEBI Circular No. Cir/ IMD/ DF/13/ 2011 dated August 2 .....

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Circular on Mutual Funds - SEBI

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..... ey Personnel”. 11. Updation of Scheme Information Document (SID) and Key Information Memorandum (KIM) 11.1. In partial modification to SEBI Circular No. SEBI/IMD/CIR No.5/ 126096/08 dated May 23, 2008, paragraph 5 on “The procedure for updation of SID and KIM” shall be read as under: “The procedure for updation of SID and KIM shall be as follows: i. For the open ended and interval schemes, the SID shall be updated within next six months from the end of the 1st half or 2nd half of the financial year in which schemes were launched. Subsequently, SID should be updated once in six months at the end of September and March. ii. The procedure to be followed in case of changes to the open ended and interval scheme shall be as under: a. In case of change in fundamental attributes in terms of Regulation 18 (15A): i. An addendum to the existing SID shall be issued and displayed on AMC website immediately. ii. SID shall be revised and updated immediately after completion of duration of the exit option (not less than 30 days from the notice date). iii. A public notice shall be given in respect of such changes in one English daily newspaper having nationwide circulation a .....

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Circular on Mutual Funds - SEBI

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..... ished in the language of the region where the Head Office of the mutual fund is situated, whichever is issued earlier.” 13.2. With respect to payment of interest in the event of failure of despatch of dividend payments within the stipulated time period in terms of Regulation 53(a) of MF Regulations, it is clarified that the interest for the delayed payment of dividend shall be calculated from the record date. 13.3. With respect to declaration of dividends upto monthly frequency, it has been decided that trustees can delegate to the officials of AMC to declare and fix the record date as well as decide the quantum of dividend, subject to the following: i. Record date is specified in the offer document and the same is adhered to. ii. Such delegation to AMC officials shall mandatorily include CEO of AMC and making him responsible for such declaration of dividends, subject to adhering to the policy framework as approved by Trustees. iii. The policy shall specify appropriate parameters or factors (for example Growth in NAV from the last dividend declared, or availability of adequate distributable surplus, or minimum reserves to be maintained, etc.) to be considered prior to decidin .....

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Circular on Mutual Funds - SEBI

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..... ecurities on quarterly basis. In this regard, it has been decided that the same shall be filed by the trustees within one month from the end of respective quarters (March, June, September and December). 19.2. In partial modification to SEBI Circular No. MFD/CIR/09/014/2000 dated January 5, 2000, paragraph II (5) shall be read as under: “For the purpose of reporting of transactions of dealing in securities by the trustees under Regulation 18(11) of MF Regulations, only those transactions which exceed the value of INR Five lakhs are required to be reported.” 20. Timelines for issuance of Consolidated Account Statement (CAS) 20.1. As per Regulation 36(4) of MF Regulations, the timelines for issuance of monthly and half-yearly CAS have to be prescribed. In this regard, it has been decided that: 20.1.1. The AMC shall ensure that the CAS for each calendar month is issued on or before fifteenth day of the succeeding month. 20.1.2. The AMC shall ensure that the CAS for half year is issued on or before twenty first day of the succeeding month. 21. Investment in Non-Convertible Preference Shares (NCPSs) 21.1. It has been decided that NCPSs shall be treated as debt instruments and .....

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Circular on Mutual Funds - SEBI

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