Guarantee Scheme for Corporate Debt (GSCD) approved - Debt raised/ to be raised by Corporate Debt Market Development Fund (CDMDF) for the purpose of providing guarantee cover. - G.S.R. 559 (E) - Indian Law

MINISTRY OF FINANCE (Department oF Economic Affairs) (FINANCIAL MARKETS DIVISION) NOTIFICATION New Delhi, the 26th July, 2023 G.S.R. 559(E). The Central Government has approved the Guarantee Scheme for Corporate Debt (GSCD) for the purpose of providing guarantee cover against debt raised/ to be raised by Corporate Debt Market Development Fund (CDMDF). 1. Name of the Scheme/Fund The Scheme shall be named as Guarantee Scheme for Corporate Debt (GSCD) and the Trust/ Fund to manage the scheme shall be named as Guarantee Fund for Corporate Debt (GFCD). GFCD shall be a Trust Fund formed by Department of Economic Affairs (DEA), Ministry of Finance, Government of India and shall be managed by National Credit Guarantee Trustee Company Ltd. (NCGTC), a wholly owned company of the Department of Financial Services (DFS), Ministry of Finance, Government of India. 2. Purpose of the Scheme To provide 100% guarantee cover against debt raised/to be raised by CDMDF, an Alternative Investment Fund (AIF) created/ to be created under relevant SEBI Regulations, for the purpose of investing in corporate debt securities at times of market dislocation with a view to stabilize the markets. The guarantee shall cover debt raised, along with interest accrued and other bank charges thereon, and shall not exceed Rs.30,000 crore. The framework for CDMDF has been detailed in Annexure . 3. Date of commencement The scheme guidelines shall come into force from the date of issue of this Notification. 4. Duration of scheme The Scheme would be initially for a period of 15 years from the initial closing date of CDMDF, extendable at the discretion of the DEA in consultation with SEBI. 5. Definitions For the purposes of this Scheme (i) Backstop Facility refers to the institutional framework being created to enable purchase of investment grade debt securities, particularly during market dislocation. (ii) Corporate Debt Market Development Fund (CDMDF) means an Alternative Investment Fund (AIF) created/ to be created under SEBI Regulations, for the purpose of investing in corporate debt securities at times of market dislocation with a view to stabilize the markets. (iii) Corpus of CDMDF means total funds committed at CDMDF; (iv) Framework means the framework of CDMDF (v) Investment Grade Debt Securities means debt securities with minimum rating of BBB- (triple B minus) or equivalent as assessed by a credit rating agency registered with SEBI at the time of making investments. (vi) Member Lending Institutions (MLIs) means lending institutions including Scheduled Commercial Banks/ other financial intermediary approved by GFCD. (vii) Tenure of Guarantee Cover means the maximum period of guarantee cover; (viii) Market Dislocation refers to the stress in the financial sector of the economy and shall be decided by the SEBI Board as per the Framework. 6. Eligible Unitholders of CDMDF and their contribution Eligible members of CDMDF shall be: (i) Debt-oriented Mutual Fund schemes, as may be specified by SEBI from time to time. These schemes shall contribute 25 bps of their Assets Under Management (AUM) and provide additional incremental contributions as their AUM increases on half-yearly basis. (ii) Existing/ new Asset Management Companies (AMCs) of specified debt-oriented MF schemes shall make a one-time contribution equivalent to 2 bps of their AUM. The contributions made by the Debt-oriented Mutual Fund schemes and AMC thereof shall be held in the form of investment in units of CDMDF by the contributors. 7. Activities of CDMDF Some basic features of the Framework are given hereunder: (i) Activities of CDMDF shall be monitored by SEBI on regular basis; (ii) In normal times, CDMDF shall deal only in liquid and low-risk debt instruments, using only its corpus; (iii) In times of market dislocation, CDMDF shall be eligible to raise debt not exceeding 10 times of contribution to its corpus from banks or bond market or repo market, subject to maximum guarantee of Rs. 30,000 crore under the Scheme; (iv) The corpus of CDMDF and debt so raised by CDMDF shall be utilized to purchase and hold eligible corporate debt securities of investment grade from the participating investors with residual maturity not exceeding 5 years; (v) CDMDF will offload a large part of its holdings within a reasonable time of 3 months from the end of market dislocation period. However, the timeline may be extended with the approval of SEBI Board. 8. Guarantee Issue and Monitoring Mechanism (i) The MLI, after due screening of the application of CDMDF, shall sanction the loan to CDMDF and enter the requisite details on NCGTC s portal designed for the said purpose. (ii) A Guarantee Number, based on preliminary screening by the portal and approval by NCGTC, shall be auto generated indicating the availability of guarantee on the said loans. (iii) Once the guarantee number is issued to MLI, the MLI shall enter the details of the loans disbursed to CDMDF on NCGTC s portal within two days of disbursement. (iv) CDMDF shall arrange to forward details of utilization of the loans on NCGTC s portal on a daily basis. (v) The authorized person of CDMDF shall enter the details of the sale of debt instruments on NCGTC s portal on the day of sale itself. (vi) The guarantee against the drawl amount shall remain valid for the period of five years from the last day of market dislocation. However, guarantee shall be valid upto the date of claim in case of claim. 9. Guarantee Settlement Mechanism (i) CDMDF shall enter the details of settlement made as per the waterfall mechanism explained in the framework along with a Statutory Auditor Certificate in this regard; (ii) Based on the loss estimated, along with the Statutory Auditor Certificate certifying the loss incurred, the MLI shall submit claim on NCGTC s portal. (iii) Based on the details at (i) (ii) above, if any payout is made by GFCD at any stage, then NCGTC shall assess the same and arrange to pay the guaranteed amount to MLI in the next 60 days. 10. Guarantee Fee GFCD shall charge guarantee fee at 0.5% p.a. of outstanding loans on daily pro-rata basis (i.e. for the period for which loans are raised) till a claim is lodged. This fee shall be paid by the MLIs. The demand advice for guarantee fees shall be auto generated and forwarded to the authorized officer of the MLIs on 1st day of each quarter for loans outstanding during the previous quarter. The MLIs shall recover this guarantee fee from CDMDF. 11. Agreement to be executed by the CDMDF CDMDF shall submit a duly signed undertaking to NCGTC for the operation of the Scheme, as per format to be made available and arrange to make payment of the applicable guarantee fee to the MLIs. 12. Agreement to be executed by the MLIs A MLI shall not be entitled to a guarantee in respect of eligible loans granted by it to CDMDF unless it has submitted a duly signed undertaking to NCGTC, as per format to be made available. 13. Responsibilities of CDMDF under the Scheme (i) Furnish the updated details of the contributors of CDMDF on NCGTC s portal from time to time. (ii) Raise loans from the MLIs as per policy approved by the Board of CDMDF. (iii) Payment of Guarantee fees to the MLIs from time to time. (iv) Follow a transparent mechanism for purchasing the eligible debt securities and compliance of all prudential norms as given in the framework and prescribed by SEBI from time to time. (v) Arrange to provide price movement of purchased debt securities on a daily basis during the period till loan is outstanding; (vi) Ensure to provide statements and information as GFCD may require 14. Responsibilities of the MLIs under the Scheme (i) Payment of Guarantee fees to GFCD from time to time; (ii) Ensure to provide statements and information as GFCD may require; (iii) Comply with such directions as may be issued by GFCD from time to time with regard to the scheme guidelines. 15. Responsibilities of SEBI under the Scheme (i) Creation of CDMDF; (ii) Once the backstop facility is activated, i.e. market dislocation is declared, then SEBI will review its continuation internally and confidentially every fortnight. While making such reviews, the number of Watch Lists/ Alerts/ Triggers from the FSI during the fortnight would be factored in by SEBI; (iii) Comply with such other directions, regarding the operation of the Scheme, that DEA may provide to SEBI from time to time. 16. Management Committee of GFCD (i) There shall be a Management Committee (MC) constituted by the Department of Economic Affairs (DEA), Ministry of Finance to oversee the affairs of the Trust. (ii) The MC shall be responsible for reviewing, supervising and monitoring the functioning of the Trust and shall provide necessary guidance to the Trust/Trustee on broad policy matters related to the Scheme. (iii) The MC shall be fully empowered to recommend changes/modifications in the scheme as it may deem fit, for approval of the Competent Authority. (iv) DEA may entrust the MC with such other responsibilities as it may deem necessary in the interest of the scheme. (v) The structure of the MC shall be as under: a) Secretary, DEA, Chairperson b) Financial Advisor, DEA, Member c) Additional/Joint Secretary, Financial Market, DEA, Member d) Joint Secretary, Department of Financial Services, Member e) Chief Executive Officer (CEO), NCGTC, Member Secretary f) Other Experts as may be nominated by the Secretary, DEA from time to time. (vi) The MC may invite to its meetings such expert(s) from the industry/relevant field as it may consider necessary as Special lnvitee(s) for seeking advice and guidance on the matters of the Scheme. (vii) A member appointed as above in his/ her ex-officio capacity shall remain as a member only as long as he/ she holds that office and upon his/ her vacating that office, his/ her successor shall become a member without any further Act or Deed. (viii) DEA may, if required, change the constitution of the MC by incorporating a new corporate entity or otherwise. [F. No. 1/13/2020-PM] SURBHI JAIN, Jt. Secy. Annexure Framework for Corporate Debt Market Development Fund (CDMDF) 1. Background 1.1 With the aim to develop the corporate debt market in India, the Central Government, as part of the Union Budget 2021-22 announced the following regarding developing a Backstop Facility for corporate debt securities: To instill confidence amongst the participants in the Corporate Bond Market during times of stress and to generally enhance secondary market liquidity, it is proposed to create a permanent institutional framework. The proposed body would purchase investment grade debt securities both in stressed and normal times and help in the development of the Bond market . 1.2 Availability of a Backstop Facility as envisaged above is expected to provide stability to the debt market during times of market dislocation. The proposed facility is envisaged to facilitate liquidity in the corporate debt market and to respond quickly in times of market dislocation, to achieve the following: (i) To build confidence of participants in the Corporate Bond Market. (ii) To bring liquidity and stability in the Corporate Bond Market. (iii) To address risk aversion during times of market dislocation including for securities rated below AAA, as a Buyer of last resort . (iv) To ease redemption pressures in mutual fund schemes during times of market dislocation. (v) To facilitate liquidity for investors at large. 2. Proposed Mechanism of CDMDF 2.1 Structure and Tenure : (i) CDMDF would be set up as an Alternative Investment Fund (AIF) in the form of a Trust under SEBI (Alternative Investment Funds) Regulations, 2012 (AIF Regulations). (ii) CDMDF shall be launched as a closed-ended scheme with an initial tenure of 15 years from the date of its initial closing. Based on the requirements of the corporate bond market, the tenure can be extended with prior approval of the Government of India in consultation with SEBI. The entire framework shall be reviewed after 12 years from the date of its initial closing. (iii) The Investment Manager-cum-Sponsor of the Fund shall be SBI Funds Management Ltd., the Asset Management Company of SBI Mutual Fund ( SBI AMC ), which is a Deemed Government Company under the Companies Act, 2013, as it is owned and controlled directly or indirectly by the Government. As per the audited accounts as on March 31, 2021, SBI holds ~63% stake in SBI Funds Management Limited (SBI AMC) and ~37% stake is held by AMUNDI Asset Management through a wholly owned subsidiary, AMUNDI India Holding. (iv) SBI AMC will be the settlor of the Fund. A new trustee company will be set up by SBI with 2/3rd independent directors in its Board. Unit holders of the Fund shall be the beneficiary. (v) The fees and expenses of CDMDF shall be decided by the SEBI Board and will be reviewed from time to time. (vi) The units of CDMDF shall be subscribed by Asset Management Companies (AMCs) of Mutual Funds (MFs) and specified debt-oriented MF Schemes (i.e., Open ended Debt oriented Mutual Fund schemes excluding Overnight funds and Gilt funds and including Conservative Hybrid funds). (vii) Specified debt-oriented MF Schemes shall invest 25 bps of their AUM in the units of CDMDF. Further, AMCs shall make a one-time contribution equivalent to 2 bps of the AUM of specified debt-oriented MF Schemes managed by them. Contribution from specified debt-oriented MF schemes and AMCs, including the appreciations on the same, if any, is to be locked-in till winding up of the Fund. However, in case of winding up of contributing MF Schemes, inter-scheme transfers within the same mutual fund or across mutual funds may be undertaken. (viii) The Fund shall remain partially open for additional contributions by: a. AMCs and specified debt-oriented MF Schemes of new MFs. b. New schemes of the said categories of existing MFs. c. All MF Schemes of the said categories due to increase in AUM. (ix) Contribution by MF schemes is an investment and not an expense, and hence shall form part of Net Assets (NAV) of MF schemes, including for the purpose of subscriptions and redemptions by unitholders of concerned MF scheme. 2.2 Activities: (i) In normal times, the CDMDF shall deal only in liquid and low-risk debt instruments such as low duration G-Secs, T-bills, Tri-party Repo on G-sec, AAA debt securities etc. using only its corpus. The Fund may also be permitted to undertake various activities related to corporate debt market including repo, Securities Lending and Borrowing Mechanism (SLBM), etc., as may be permitted by SEBI Board from time to time, subject to suitable risk management measures. (ii) In times of market dislocation, CDMDF shall purchase and hold eligible corporate debt securities from the participating investors and sell as markets recover. (iii) CDMDF will monitor the near normalcy of the market post market dislocation in consultation with SEBI and offload a large part of its holdings within a reasonable time of 3 months from the end of the market dislocation period. However, the above timeline may be extended with the approval of SEBI Board. (iv) The securities purchased by CDMDF need to have an investment grade credit rating and residual maturity not exceeding 5 years on the date of purchase. CDMDF shall not buy unlisted or below investment grade or defaulted debt securities or securities in respect of which there is a material possibility of default or adverse credit news or views. 2.3 Funding: (i) The contribution to the Fund shall be mandatory for the specified debt-oriented MF Schemes and AMCs as laid down by SEBI. (ii) Specified debt-oriented MF Schemes shall contribute 25 bps of their AUM to the Fund (~Rs. 3,005, Cr. based on AUM as on August 31, 2022). (iii) AMCs shall make a one-time contribution equivalent to 2 bps of the AUM of their specified debtoriented MF schemes. Further, AMCs of new MFs shall also make a one-time contribution equivalent to 2 bps of their specified debt-oriented MF schemes, based on the AUM at the end of the financial year following the one in which the specified scheme(s) are launched. (iv) The Fund will be eligible to take leverage of up to 10 times of contribution to corpus, from banks or bond market or repo market which shall be guaranteed by NCGTC up to a maximum of Rs. 30,000 Cr. (v) Specified debt-oriented MF Schemes shall provide additional incremental contribution as their AUM increases, on half-yearly basis. However, if AUM decreases there shall be no return or redemption from CDMDF. (vi) New schemes from existing MFs under the specified categories or such schemes of new MFs shall also contribute 25 bps of their respective AUM and make incremental contribution in accordance with para (v) above. 2.4 Access to the Fund (i) Access to the Fund shall be in proportion to the contribution made to the Fund at a mutual fund level in accordance with detailed guidelines as may be approved by SEBI. (ii) The Fund shall be available to specified mutual fund Schemes during market dislocation, utilization of which shall be voluntary. 2.5 Governance Mechanism for CDMDF 2.5.1. Board of Trustees/Trustee Company: (i) At the time of constitution of the trust, the Board of Trustees/Trustee Company, shall be appointed with prior approval of the SEBI Board. The Directors of the Trustee Company shall be appointed with prior approval of SEBI. (ii) Board of Trustees/ Trustee Company will comprise two-third of Independent Directors. Of the remaining one-third, one member shall be nominated by AMFI. The activities of the Board of Trustees/ Trustee Company would be to approve governance standards and policies of the Investment Manager (IM) (i.e. SBI AMC) and monitor activities of the Fund and the IM. (iii) The role and responsibilities of trustees would be similar to the role and responsibilities assigned to trustees under SEBI (Mutual Funds) Regulations, 1996 (MF Regulations). An Audit Committee of the Board of Trustee shall be constituted, which shall review compliance with the provisions of Private Placement Memorandum (PPM) as required under AIF Regulations along with other responsibilities as may be specified. (iv) Any change in investment strategy of the CDMDF may only be with the prior approval of SEBI. 2.5.2. Governance Committee (GC): (i) GC will be appointed by the Investment Manager and shall comprise corporate bond market experts including academicians, CEOs or CIOs, risk management professionals, independent market experts, etc. (ii) All the policies of the Fund shall be jointly approved by the GC, Board of IM and Board of Trustee/Trustee Company. (iii) GC, while also approving the policies of the Fund, would take a more hands-on approach to supervise the activities of the Fund and oversight of the Investment Committee, especially relating to management of conflict of interest, if any. (iv) GC will also have oversight on management of asset liability mismatches during times of market dislocation as borrowed money would be used to purchase assets of the scheme at that stage. 2.5.3. The Investment Committee (IC) shall be internal to the Investment Manager and would perform various activities of the Fund, including the actual buy and sell decisions of the Fund. Any deviation from the fair price would need to be mandatorily approved by the Investment Committee of the CDMDF. 2.5.4. Management Team would be a part of IM which includes the fund management, trading, risk and research team etc. and comprises experienced professionals (such as fund managers and risk managers). 2.6 Trigger and Duration of Market Dislocation (i) As the Sectoral Regulator for Corporate Debt Market, the SEBI Board shall decide the trigger of debt market disruption warranting the Backstop Facility to operate in times of market dislocation and consequently the need for activation of the guarantee by the NGCTC. (ii) The broad parameters of the model (i.e., Financial Stress Index (FSI)) shall use India Fixed Income Forex comprising of 10 indicators pertaining to Indian Bond market and Forex market and as may be modified from time to time based on learnings, in consultation with the Government of India and the same shall be placed in public domain. In case of trigger of the index (FSI), it should be immediately brought to the notice of the SEBI Board and accordingly, the Board will make the subjective assessment of the situation. In order to take this decision, the SEBI Board shall consider various parameters reflecting the status of the market and the need for intervention including the output of a model which has been prepared for this purpose to identify signals of stress in the Indian corporate bond market. (iii) Further, during times of market dislocation, the period for which the Backstop Facility will be open shall be decided by the SEBI Board and which can be extendable. (iv) Since SEBI Board has representatives from Department of Economic Affairs (DEA), Ministry of Corporate Affairs (MCA), Reserve Bank of India (RBI) and other independent professional, thus SEBI would be benefited from their perspectives at that time. (v) The market dislocation period may be considered to have ended, if no alert from the aforesaid model appears for a continuous period of 3 months. (vi) The activities of the fund during times of market dislocation shall be reported to the FSDC and the Government of India. 2.7 Mechanism of Borrowing based on Guarantee through NCGTC (i) The guarantee shall become operative upon trigger of bond market dislocation. Borrowing shall be drawn by the Fund as required, against the said Guarantee. (ii) At any point in time, guarantee will not exceed the specified amount of Rs. 30,000 Cr. (iii) Guarantee fee, as decided by the Government of India, shall be paid at the time of availing the guarantee facility on an annual basis on the outstanding loan amount daily pro rata. (iv) Over the tenure of the Fund there could be multiple instances of trigger. (v) The recovery from sale of assets held shall be settled against the claim from borrowing. (vi) Shortfall, if any, is to be absorbed in accordance with the waterfall mechanism for loss absorption as laid down in this framework. (vii) If recovery is greater than the borrowing, excess can be retained by the Fund (viii) In case of invocation of guarantee, underlying outstanding bank loans/debt obligations, would be paid by the NGCTC. (ix) During the period when borrowing against the guarantee is outstanding, no payouts (wherever permitted) to unitholders should be made. 2.8 Mechanism of investment during times of Market Dislocation (i) The Fund shall buy single or basket of listed investment grade corporate debt securities with tenure not exceeding residual maturity of 5 years only from the secondary market from the contributing MF schemes at fair price determined as per existing norms of valuation (adjusted for liquidity risk, interest rate risk and credit risk). At a portfolio level, the sellers of debt securities would be paid 90% of the consideration in cash and 10% in terms of units of CDMDF. (ii) The Fund can hold the corporate debt securities till maturity or can sell the same in the secondary market when the market dislocation eases out. Since the objective is to provide liquidity at times of market dislocation, CDMDF will monitor the market post market dislocation in consultation with SEBI and offload a large part of its holdings within a reasonable time period of 3 months from the end of market dislocation period, while avoiding fire sales . However, the above timeline may be extended with approval of SEBI Board. (iii) The Fund may charge a transaction fee from the seller(s) of the corporate debt securities during market dislocation and the same will be credited to the Fund. No fee is to be charged to buyers of debt securities from the Fund. The policy in this regard shall be approved by GC, the Board of IM and Trustees. (iv) Trading Price will be as per the policy approved by the GC, Board of IM and Trustees. (v) The Fund shall purchase at a fair price (adjusted for liquidity risk, interest rate risk and credit risk) but not at distress price. (vi) The valuation of the portfolio by the Fund shall be governed by the existing norms on valuation as applicable under the extant MF Regulatory framework. The valuation policy shall be approved by the GC, Board of IM and Trustees. (vii) In case the rating of the debt securities forming part of the CDMDF portfolio is downgraded below investment grade, the same shall be reflected in daily NAV. 2.9 Moral Hazard Mitigation 2.9.1. Prudential Norms (i) The Fund shall not buy unlisted or below investment grade or defaulted debt securities or such securities in respect of which there is a material possibility of default or adverse credit news or views. (ii) Further, either a list of investment grade debt securities of eligible issuers shall be disclosed on the website of the IM or a transparent mechanism is to be followed for purchasing of debt securities of various issuers from specified mutual fund schemes. (iii) Prudential limits shall be as decided by the SEBI Board from time to time. To begin with the following would be the prudential limits: a. Single issuer limit-5% of the aggregate of the corpus and maximum permissible debt; b. Group limits - 7.5% of the aggregate of the corpus and maximum permissible debt (iv) Limit for buying debt securities from a single MF shall be in proportion to aggregate contribution by all the schemes of the said MF to the Fund in accordance with detailed guidelines as may be approved by SEBI. 2.9.2. Loss Absorption Waterfall The issue of moral hazard is addressed by way of skin in the game from AMCs and the contributing MF schemes. The CDMDF shall buy securities at fair price adjusted for liquidity risk, interest rate risk and credit risk. Further, the risk of first loss shall rest with MF schemes selling to the Fund. Details of the same areas under: Level of loss absorption Particulars Amount. (INR) 1st Up to 10% by MF schemes selling debt securities to the Fund (i.e., equivalent to the units outstanding of the selling MF schemes issued to them against sale of securities to CDMDF) ~ Upto Rs. 3,600 cr.* 2nd Contribution of specified debt-oriented MF Schemes and AMCs ~ Upto Rs. 3,245 cr.* 3rd Government Guarantee ~ Upto Rs. 30,000 cr. *Based on AUM of specified debt-oriented MF Schemes as on August 31, 2022 and may vary depending on AUM 2.10 Reporting and Monitoring Mechanism (i) CDMDF being an AIF will be regulated by SEBI under AIF Regulations. Considering the strategic importance of the entity, a mechanism shall be developed for periodic reporting (monthly basis) to SEBI. (ii) The reporting to the Government of India shall be made on quarterly basis regarding investment and operational affairs of the CDMDF. (iii) During times of market dislocation, if securities are purchased by borrowings under guarantee from NGCTC, there shall be daily reporting of the portfolio and the remaining available headroom for purchase of debt securities, to NGCTC, Government of India and SEBI. (iv) The detailed format for the above reporting shall be prescribed by SEBI. (v) The Government of India may at any time call for any information from the CDMDF through SEBI with respect to any matter relating to its activities as an Alternative Investment Fund or for the assessment of systemic risk or prevention of frauds. 2.11 Role of SEBI (i) The SEBI Board shall decide the trigger of debt market disruption warranting the Backstop Facility to operate in times of market dislocation and consequently the need for activation of guarantee by the NGCTC. Further, the period for which the Backstop Facility will be open shall also be as decided by the SEBI Board. (ii) CDMDF being an AIF will be regulated by SEBI under AIF Regulations. (iii) The Trustee Company shall be appointed by the SEBI Board. The directors of the Trustee Company shall be appointed with prior approval of SEBI. (iv) Change in investment strategy of CDMDF would only be with prior approval of SEBI. (v) CDMDF will monitor the near normalcy of the market post market dislocation in consultation with SEBI and offload a large part of its holdings within a reasonable time period of 3 months from the end of market dislocation period. However, the above timeline may be extended with the approval of SEBI Board. (vi) Periodic reporting (monthly basis) of the activities of the Fund to SEBI. Further, the activities of the Fund during times of market dislocation shall be reported to the SEBI Board, FSDC and the Government of India on daily basis. The detailed format for the above reporting shall be prescribed by SEBI. (vii) Once the backstop facility is activated, SEBI will review its continuation internally and confidentially every fortnight. While making such reviews, the number of Watch Lists/ Alerts/ Triggers from the FSI during the fortnight would be factored in by SEBI. Subsequent to such fortnightly review, if the SEBI Board comes to a view that backstop facility could be withdrawn, the facility can then be withdrawn with two days notice to the market. (viii) The market dislocation period may be considered to have ended, if no alert from the aforesaid model appears for a continuous period of 3 months. 2.12 Disclosures (i) There shall be a mechanism for daily disclosure of NAV to the unitholders. (ii) The portfolio of the Fund would be disclosed to the unitholders on fortnightly basis. (iii) The norms applicable to AMCs and MF schemes for disclosure in respect of their investments in CDMDF shall be specified appropriately under the regulatory framework for MFs. 2.13 Audit of CDMDF by CAG CDMDF being floated by SBI AMC may be audited by auditors appointed by C AG, provisions relating to the same shall be appropriately incorporated in the trust deed of CDMDF. Department of Economic Affairs (DEA) would request C AG to appoint auditors for the Fund.