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Circular on Mutual Funds


 Notice Date : 22 May 2014

CIRCULAR 
 
CIR/IMD/DF/10/2014 May 22, 2014 

 

All Mutual Funds/Asset Management Companies (AMCs)/ 
Trustee Companies/Boards of Trustees of Mutual Funds 
 
Sir/ Madam, 
 
Subject: Circular on Mutual Funds 
 
A. Cash investments in Mutual Funds 
 
1. SEBI, vide circular no. CIR/IMD/DF/21/2012 dated September 13, 2012, had 
permitted cash transaction in mutual funds to the extent of `20,000/- per investor, 
per mutual fund, per financial year. 
 
2. In partial modification to para I (1) of the aforesaid circular, it has been decided to 
increase the limit of cash transactions in mutual funds from the existing limit of 
`20,000/- per investor, per mutual fund, per financial year to `50,000/- per investor, 
per mutual fund, per financial year, subject to (i) compliance with Prevention of 
Money Laundering Act, 2002 and Rules framed there under, the SEBI Circular(s) 
on Anti Money Laundering (AML) and other applicable AML rules, regulations and 
guidelines and (ii) sufficient systems and procedures in place. 
 
B. Investment/Trading in Securities by Employees of Asset Management 
Companies and Trustees of Mutual Funds 
 
1. Please refer to SEBI circular dated May 08, 2001 and circular dated July 11, 2003, 
on guidelines for Investment/Trading in Securities by Employees of Asset 
Management Companies (AMCs) and Trustees of Mutual Funds. 
 
2. Considering that since the issuance of aforesaid guidelines, liquid schemes have 
emerged as a distinct category of Mutual Fund scheme having features similar to 
that offered by Money Market Mutual Fund (MMMF) schemes, thus, in partial modification to aforesaid circulars, it has been decided that - 
 
a. In point 1.1 (iii) of the guidelines for Investment/Trading in Securities by 
Employees of Asset Management Companies (AMCs) and Trustees of Mutual 
Funds, along-with MMMF schemes, Liquid schemes shall be added in list of 
securities to which the aforesaid guidelines do not apply. 
 
b. In point 3 of the aforementioned guidelines, along-with MMMF schemes, 
transaction in Liquid schemes shall be exempted from being reported by 
employees to compliance officer within 7 calendar days from the date of 
transaction. 
 
c. In Point 3.2 of the aforesaid guidelines, which mentions various situations 
wherein employees of AMC & Trustees of Mutual Funds shall not purchase or 
sell units of any schemes, term 'liquid scheme' shall be included along-side 
MMMF schemes. 
 
This circular is issued in exercise of the powers conferred under Section 11 (1) of the 
Securities and Exchange Board of India Act, 1992, read with the provision of Regulation 
77 of SEBI (Mutual Funds) Regulations, 1996 to protect the interests of investors in 
securities and to promote the development of, and to regulate the securities market. 
 

Yours faithfully, 
  
RAJESH GUJJAR 
Deputy General Manager 
Tel no.: 022-26449232 
Email: rajeshg@sebi.gov.in

 

Guest
on 29 May 2014
Notification No : CIR/IMD/DF/10/2014
Published in Others
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