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TMI BlogSeeks to Amend the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996.X X X X Extracts X X X X X X X X Extracts X X X X ..... (I), sub-regulation (II), sub-regulation (III), sub-regulation (IV), clause (ii) of sub-regulation (VII) and sub-regulation (XXIV) of Regulation 3 shall come into force with effect from August 1, 2023, while the amendments to clause (i) of sub-regulation (VII) of Regulation 3 shall come into force with effect from January 1, 2024. 3. In the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996,-- I. in regulation 2, sub-regulation (1), i. after clause (n), the following clause shall be inserted, namely,- "(na) "Liquid networth" means the networth deployed in liquid assets which are unencumbered and shall include cash, money market instruments, Government Securities, Treasury bills, Repo on Government securities and any other like instruments as specified by the Board from time to time." ii. clause (qa) shall be renumbered as clause (qb) and before the clause so renumbered, the following clause shall be inserted, namely,- "(qa) "NAV" or "Net Asset Value" shall mean the value computed in the manner provided in sub-regulation (1) of regulation 48 of these regulations;" iii. in clause (y), the words and symbols " "trustees" mean the Board of Trustees or th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e total combined experience of Chief Executive Officer, Chief Operating Officer, Chief Risk Officer, Chief Compliance Officer and Chief Investment Officer should be at least thirty years; and (iv) ensure that in case of acquisition of existing asset management company, the sponsor shall have minimum positive liquid net worth equal to incremental capitalization required to ensure minimum capitalization of the asset management company and the positive liquid net worth of the sponsor or the funds tied up by the sponsor are to the extent of aggregate par value or market value of the shares proposed to be acquired, whichever is higher; and (v) ensure that in case of acquisition of stake in an existing asset management company, the shareholding equivalent to at least rupees one hundred fifty crore shall be locked in for five years; and (vi) ensure that other conditions in this regard as may be specified by the Board from time to time are adhered to: Provided further that a private equity fund or a pooled investment vehicle or a pooled investment fund may also be permitted to sponsor mutual funds subject to such other conditions as may be specified by the Board from time to time.& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the mutual fund for the holders of the units of any scheme" shall be substituted with the words "ensure that the income calculated by the asset management company under sub-regulation (25) of regulation 25 of these regulations is"; v. sub-regulation (15A) shall be substituted with the following, namely,- "(15A) The trustees shall ensure that no change in the fundamental attributes of any scheme, the fees and expenses payable or any other change which would modify the scheme and affect the interest of the unit holders is carried out by the asset management company, unless it complies with sub-regulation (26) of regulation 25 of these regulations."; vi. sub-regulation (19) shall be substituted with the following, namely,- "(19) The trustees shall periodically review the service contracts relating to custody arrangements and satisfy themselves that such contracts are executed in the interest of the unit holders."; vii. in sub-regulation (25), after clause B, the following clause shall be inserted, namely,- "C. The trustees shall also exercise due diligence on such matters as may be specified by the Board from time to time." VII. in regulation 21, in sub-regulation (1), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Trustees, within fifteen days of their appointment; (iii) appointed auditors to audit its accounts; (iv) appointed a compliance officer who shall be responsible for monitoring the compliance of the Act, rules and regulations, notifications, guidelines, instructions, etc., issued by the Board or the Central Government and for redressal of investors grievances; (v) appointed a registrar to an issue and share transfer agent registered under the Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 and laid down parameters for their supervision; (vi) prepared a compliance manual and designed internal control mechanisms including internal audit systems; (vii) specified norms for empanelment of brokers and marketing agents; (viii) obtained, wherever required under these regulations, prior in principle approval from the recognized stock exchange(s) where units are proposed to be listed. (b) The board of directors of the asset management company shall ensure that - (i) the asset management company has been diligent in empanelling the brokers, in monitoring securities transactions with brokers and avoiding undue concen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fy the scheme and affect the interest of unit holders, shall be carried out unless,-- (i) a written communication about the proposed change is sent to each unit holder and an advertisement is issued in one English daily newspaper having nationwide circulation as well as in a newspaper published in the language of region where the Head Office of the mutual fund is situated; and (ii) the unit holders are given an option to exit at the prevailing Net Asset Value without any exit load." IX. After regulation 25, the following regulation shall be inserted, namely,- "Meeting of the board of directors of the trustee company and the board of directors of the asset management company. 25A. The board of directors of the trustee company and the board of directors of the asset management company, including any of their committees, shall meet at such frequency as may be specified by the Board from time to time." X. Regulation 31A shall be substituted with the following, namely,- "In-principle approval from recognised stock exchange(s). 31A. For listing of units of any scheme of a mutual fund on the recognised stock exchange(s), the asset management company of that mutual fund shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the words "asset management company". XXI. In regulation 57, the words "Every mutual fund" shall be substituted with the words "Every asset management company". XXII. In regulation 59A, the words "A mutual fund" shall be substituted with the words "An asset management company". XXIII. In the First Schedule, in Form C,- iii. in clause (1), the words "trust company", wherever appearing, shall be substituted with the words "trustee company"; iv. clause (3) shall be omitted. XXIV. In the Seventh Schedule, in clause 9, after sub-clause (c), the following proviso shall be inserted, namely,- "Provided that for the private equity fund or a pooled investment vehicle or a pooled investment fund acting as sponsor of mutual funds, the associate or group company shall also include,- a. associate or group company of the manager of any pooled investment vehicle; or b. investee companies in which the shareholding of ten percent or more is held by the schemes or funds managed by manager of the pooled investment vehicle; or c. any investee company in which the pooled investment vehicle holds more than ten percent shareholding or where the directors of the pooled investment vehicle o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2002 vide S.O. No. 219 (E). (11) On June 11, 2002 by the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2002 vide S.O. No. 625 (E). (12) On July 30, 2002 by the Securities and Exchange Board of India (Mutual Funds) (Third Amendment) Regulations, 2002 vide S.O. No. 809 (E). (13) On September 9, 2002 by the Securities and Exchange Board of India (Mutual Funds) (Fourth Amendment) Regulations, 2002 vide S.O. No. 956 (E). (14) On September 27, 2002 by the Securities and Exchange Board of India (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 vide S.O. No.1045 (E). (15) On May 29, 2003 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2003 vide S.O. No. 632 (E). (16) On January 12, 2004 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2004 vide F.No. SEBI/LAD/DOP/4/2004. (17) On March 10, 2004 by the Securities and Exchange Board of India (Criteria for Fit and Proper Person) Regulations, 2004 vide S.O. No. 398 (E). (18) On January 12, 2006 by the Secur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 290. (34) On September 26, 2012 by the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2012 vide No. LAD-NRO/GN/2012-13/17/21502. (35) On April 16, 2013 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2013 vide No. LAD-NRO/GN/2013-14/03/5652. (36) On June 19, 2013 by the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2013 vide No. LAD-NRO/GN/2013-14/12/6108. (37) On August 19, 2013 by the Securities and Exchange Board of India (Mutual Funds) (Third Amendment) Regulations, 2013 vide No. LAD-NRO/GN/2013-14/18/6384. (38) On May 6, 2014 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2014 vide No. LAD-NRO/GN/2014-15/01/1039. (39) On May 23, 2014 by the Securities and Exchange Board of India (Payment of Fees) (Amendment) Regulations, 2014 vide No. LAD-NRO/GN/2014-15/03/1089. (40) On December 30, 2014 by the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2014 vide No. LAD-NRO/GN/2014-15/19/1973. (41) On May 15, 2015 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Reg ..... X X X X Extracts X X X X X X X X Extracts X X X X
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