Regulation 73 - Manner of repayment and winding up - Securities and Exchange Board of India (Collective Investment Schemes) Regulations, 1999

Manner of repayment and winding up 73. (1) An existing collective investment scheme which: (a) has failed to make an application for registration to the Board; or (b) has not been granted provisional registration by the Board; or (c) having obtained provisional registration fails to comply with the provisions of regulation 71; shall wind up the existing 1 [collective investment scheme]. (2) The existing Collective Investment Scheme to be wound up under sub-regulation (1) shall send an information memorandum to the investors who have subscribed to the 2 [collective investment scheme]s, within two months from the date of receipt of intimation from the Board, detailing the state of affairs of the 3 [collective investment scheme], the amount repayable to each investor and the manner in which such amount is determined. (3) The information memorandum referred to in sub-regulation (2) shall be dated and signed by all the directors of the 4 [collective investment scheme]. (4) The Board may specify such other disclosures to be made in the information memorandum, as it deems fit. (5) The information memorandum shall be sent to the investors within one week from the date of the information memorandum. (6) The information memorandum shall explicitly state that investors desirous of continuing with the 5 [collective investment scheme] shall have to give a positive consent within one month from the date of the information memorandum to continue with the 6 [collective investment scheme]. (7) The investors who give positive consent under sub-regulation (6), shall continue with the 7 [collective investment scheme] at their risk and responsibility : Provided that if the positive consent to continue with the 8 [collective investment scheme], is received from only twenty-five per cent or less of the total number of existing investors, the 9 [collective investment scheme] shall be wound up. (8) The payment to the investors, shall be made within three months of the date of the information memorandum. (9) On completion of the winding up, the existing collective investment scheme shall file with the Board such reports, as may be specified by the Board. *************** NOTES:- 1 ibid. 2 ibid. 3 ibid. 4 ibid. 5 ibid. 6 ibid. 7 Substituted by the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2014, w.e.f. 9-1-2014. 8 ibid. 9 ibid.