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Relaxation in compliance with requirements pertaining to Mutual Funds


 Notice Date : 23 March 2020

CIRCULAR

SEBI/HO/IMD/DF3/CIR/P/2020/47 March 23, 2020

All Mutual Funds (MFs)/

Asset Management Companies (AMCs)/

Trustee Companies/ Board of Trustees of Mutual Funds/ Association of Mutual Funds in India (AMFI)

Sir / Madam,

Subject: Relaxation in compliance with requirements pertaining to Mutual Funds

1. In light of the recent market events pursuant to COVID 19, a need has been felt for temporary relaxations with respect to compliance requirements for Mutual Funds. Accordingly, SEBI has decided to grant the following relaxations specified in SEBI (Mutual Funds) Regulations, 1996 and circulars issued thereunder:

All schemes (NFO) where observation letter was issued by SEBI and yet to be launched shall have a validity period of one year from the date of SEBI letter. All new schemes (NFO) where final observation letter will be issued shall have validity period of one year from the date of SEBI letter.

The timelines for certain disclosures are extended, as follows:

Sr

No.

Regulation / Circular and associated disclosure

Filing

Timelines

Frequency

Due within

Due

Date

Extende

Date

1

Half yearly disclosures of unaudited financial results as required under Regulation 59 of SEBI (Mutual Funds) Regulations, 1996

Half yearly

One month from the close of half year, i.e March 31 2020.

April 30,

2020

May 31,

2020

2

Disclosure of commission paid to distributors as required under Point 2 (a) of SEBI circular No. SEBI/HO/IMD/DF2/CIR/P/2016/ 42 dated March 18, 2016

Half yearly

Within ten days from the half year end i.e March 31, 2020.

April 10

2020

May 10, 2020

3

Yearly disclosure of investor complaints with respect to Mutual Funds as required under Point 4 (b) of SEBI circular No. Cir / IMD / DF / 2 / 2010 dated May 13, 2010

Yearly

Within 2 months of the close of the financial year i.e March 31, 2020.

May 31, 2020

June 30, 2020

2. The effective date of implementation of certain policy initiatives have been extended as under:

Sr. No.

Circular Name

Particulars

Due Date

Extended Date

1.

Risk management framework for liquid and overnight funds and norms governing investment in short term deposits dated Sept. 20, 2019

Liquid funds shall hold at least 20% of its net assets in liquid assets.

April 1, 2020

May 1,

2020

2.

Review of investment norms for mutual funds for investment in Debt and Money Market Instruments dated October 1, 2019

Existing open ended mutual fund schemes shall comply with the revised limits for sector exposure.

April 1, 2020

May 1,

2020

3.

Review of investment norms for mutual funds for investment in Debt and Money Market Instruments dated October 1,

2019

Maximum investment in unlisted NCDs as

% of the debt portfolio of the scheme.

15% - March

31, 2020

15% - April

30, 2020

4.

Valuation of money market and debt securities dated September 24, 2019

Amortization based valuation shall be dispensed with and irrespective of residual maturity, all money market and debt securities shall be valued in terms of paragraph 1.1.2.2 of the Circular

April 1, 2020

May 1,

2020

3. Further, in light of difficulties expressed by AMCs, the access control presently exercised in the AMC’s dealing room including call recording of deals is temporarily relaxed subject to checks and balances including electronic confirmation by way of email or other system having audit trail are in place.

4. 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 Regulation 77 of the Securities and Exchange Board of India (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,

Deena Venu Sarangadharan Deputy General Manager Tel no.: 022-26449266

Email: d eenar@sebi.gov.in

 

Guest
on 26 March 2020
Notification No : SEBI/HO/IMD/DF3/CIR/P/2020/47
Published in Corporate Law
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