Circular on Mutual Funds

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ring-fenced from other schemes of the mutual fund; and bank accounts and securities accounts of each scheme are segregated and ring-fenced. 1.2 In this regard, representations were received from the industry highlighting the instances where pool accounts are used, as certain transactions are carried out only at Mutual Fund level for operational ease and due to certain regulatory requirements. However, the securities or funds held in the pool accounts at Mutual Fund level are duly segregated scheme-wise and appropriately reflected in the books of the respective schemes, at the end of day. 1.3 The issue was discussed in Mutual Funds Advisory Committee (MFAC). Based on the recommendations of MFAC, the following has been decided: .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ities accounts shall lie with the Board of AMC and Trustees. Trustees in their Half Yearly Trustee Report (HYTR) to SEBI shall confirm that the assets and liabilities of each scheme along with their bank accounts securities accounts are segregated and ring-fenced on daily basis, except the unidentified transactions of funds as mentioned in sub-para (b) above, during the half-year period. e. The whole mechanism shall be audited on half yearly basis by the auditor appointed by the trustees. 1.3.2 Further, with regard to the margin or collateral requirement for execution of certain transactions, which are carried out only at Mutual Fund level by various schemes, the following has been stipulated: a. In terms of Clause (5) of the F .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ded: a. The single issuer limit and the group exposure limit shall be calculated at the issuing bank level as BRDS are issued with recourse to the issuing bank. b. Investment in BRDS by debt schemes of mutual funds shall be considered as exposure to financial services sector for the purpose of sector exposure limits. 3. Risk Management Framework (RMF) for Mutual Funds 3.1 SEBI circular no. SEBI/HO/IMD/IMD-1 DOF2/P/CIR/2021/630 dated September 27, 2021 on Risk Management Framework (RMF) for Mutual Funds was to be effective from January 01, 2022 along with rescinding of the existing circular no. MFD/CIR/15/19133/2002, dated September 30, 2002 on Risk Management System from the same date. 3.2 Based on the request .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X