Setting up of Limited Purpose Clearing Corporation (LPCC) by Asset Management Companies (AMCs) of Mutual Funds

Last updated: 08 April 2021

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This SEBI circular updates the requirements for Asset Management Companies (AMCs) regarding the establishment of a Limited Purpose Clearing Corporation (LPCC). The key change is that the proportion of AMC contributions to the LPCC's share capital will now be based on the Average Assets Under Management (AUM) of specific debt-oriented mutual fund schemes for the Financial Year 2020-21, rather than FY 2019-20. All other conditions from the previous circular remain unchanged.

Securities and Exchange Board of India CIRCULAR SEBI/HO/IMD/IMD-1 DOF2/P/CIR/2021/0548 April 06, 2021 Asset Management Companies (AMCs)/ Trustee Companies/ Board of Trustees of Mutual Funds/ Association of Mutual Funds in India (AMFI) Sir / Madam, Subject: Setting up of Limited Purpose Clearing Corporation (LPCC) by AssetManagement Companies (AMCs) of Mutual Funds 1. SEBICircular No. SEBI/HO/IMD/DF2/CIR/P/2021/17 dated February 2, 2021prescribed the modalities for contribu

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FAQ :

The circular concerns the setting up of a Limited Purpose Clearing Corporation (LPCC) by Asset Management Companies (AMCs) of Mutual Funds.

The modification relates to the basis for calculating AMC contributions to the LPCC's share capital. It has been changed from FY 2019-20 to FY 2020-21.

The Average AUM of eligible debt-oriented mutual fund schemes for the Financial Year 2020-21 will be used.

No, all other terms and conditions stated in the SEBI circular dated February 2, 2021, remain the same.

The calculation includes open-ended debt-oriented mutual fund schemes, excluding overnight, gilt fund, and gilt fund with 10-year constant duration, but including conservative hybrid schemes.

Notification No : SEBI/HO/IMD/IMD-1 DOF2/P/CIR/2021/0548
Source : https://www.sebi.gov.in/legal/circulars/apr-2021/setting-up-of-limited-purpose-clearing-corporation-lpcc-by-asset-management-companies-amcs-of-mutual-funds_49770.html

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