Applicability of Net Asset Value (NAV) for Income/Debt oriented Mutual Fund scheme(s)/plan(s) (other than liquid fund schemes) - SEBI - SEBI/IMD/CIR No. 11/142521/08

SEBI/IMD/CIR No. 11/142521/08 October 24, 2008 All Mutual Funds Registered with SEBI Association of Mutual Funds in India (AMFI) Sir/ Madam, Re.: Applicability of Net Asset Value (NAV) for Income/Debt oriented Mutual Fund scheme(s)/plan(s) (other than liquid fund schemes). 1. Please refer to SEBI Circular SEBI/IMD/CIR No.11/78450/06 dated October 11, 2006 on the Uniform cut-off timings for applicability of Net Asset Value (NAV) of Mutual Fund Scheme(s)/ plan(s) . 2. The issue of applicability of NAV on realisation basis in case of Income/Debt oriented schemes (other than liquid fund schemes) was discussed with AMFI and in the Mutual Fund Advisory Committee. It was felt that steps need to be initiated to harmonise the NAV applicability with the realisation of money and to move away from the NAV based on the application date. 3. In view of the same, it has been decided to modify the guidelines specified in the aforementioned circular in case of large applications for purchase of Income/ Debt oriented schemes other than liquid fund schemes by inserting a clause 6 (2)(A) after clause 6(2) as under: (2)(A) In respect of purchase of units in Income/ Debt oriented schemes (other than liquid fund schemes and plans) with amount equal to or more than ₹ 1 crore, irrespective of the time of receipt of application, the closing NAV of the day on which the funds are available for utilisation shall be applicable. 4. All other conditions specified in the above mentioned circular remain unchanged. 5. This circular effective from October 30, 2008 is issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, read with the provisions 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, Ruchi Chojer