Regulation 37 - Winding up of collective investment scheme - Securities and Exchange Board of India (Collective Investment Schemes) Regulations, 1999

Winding up of 1 [collective investment scheme] 37. (1) A 2 [collective investment scheme] shall be wound up on the expiry of duration specified in the 3 [collective investment scheme] or on the accomplishment of the purpose of the 4 [collective investment scheme]. (2) Notwithstanding anything contained in sub-regulation (1), a 5 [collective investment scheme] may also be wound up- (a) on the happening of any event which, in the opinion of the trustee, requires the 6 [collective investment scheme] to be wound up and the prior approval of the Board is obtained; or (b) if unit holders of a 7 [collective investment scheme] holding at least three-fourth of the nominal value of the unit capital of the 8 [collective investment scheme] pass a resolution that the 9 [collective investment scheme] be wound up and the approval of the Board is obtained; or (c) if in the opinion of the Board, the continuance of the 10 [collective investment scheme] is prejudicial to the interests of the unit holders; or (d) if in the opinion of the Collective Investment Management Company, the purpose of the 11 [collective investment scheme] cannot be accomplished and it obtains the approval of the trustees and also of the unit holders of the 12 [collective investment scheme] holding at least three-fourth of the nominal value of the unit capital of the 13 [collective investment scheme] with a resolution that the 14 [collective investment scheme] be wound up and the approval of the Board is obtained. (3) Where a 15 [collective investment scheme] is to be wound up under sub-regulation (1) or sub regulation (2), the trustee shall give notice disclosing the circumstances leading to the winding up of the 16 [collective investment scheme] in a daily newspaper having nationwide circulation and in the newspaper published in the language of the region where the Collective Investment Management Company is registered. (4)(a) The trustee shall dispose of the assets of the 17 [collective investment scheme] concerned in the best interest of the unit holders of that 18 [collective investment scheme]. (b) The proceeds of sale realised under clause (a), shall be first utilized towards the discharge of such liabilities as are due and payable under the 19 [collective investment scheme] and after making appropriate provision for meeting the expenses connected with such winding up, the balance shall be paid to the unit holders in proportion to their unit holding. (5) On the completion of the winding up, the trustee shall forward to the Board and the unit holders : (a) a report on the steps taken for realisation of assets of the 20 [collective investment scheme], expenses for winding up and net assets available for distribution to the unit holders, and (b) a certificate from the auditors of the 21 [collective investment scheme] to the effect that all the assets of the 22 [collective investment scheme] are realised and the details of the distribution of the proceeds. (6) The unclaimed money if any at the time of winding up shall be kept separately in a bank account by the trustee for a period of three years for the purpose of meeting investors claims and thereafter shall be transferred to investor protection fund, as may be specified by the Board. ************ NOTES:- 1 ibid. 2 ibid. 3 ibid. 4 ibid. 5 Substituted by the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2014, w.e.f. 9-1-2014. 6 ibid. 7 ibid. 8 ibid. 9 ibid. 10 ibid. 11 ibid. 12 ibid. 13 ibid. 14 ibid. 15 ibid. 16 ibid. 17 ibid. 18 ibid. 19 ibid. 20 Substituted by the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2014, w.e.f. 9-1-2014. 21 ibid. 22 ibid.