The Securities and Exchange Board of India (SEBI) has notified the new amendment in Mutual Funds regulations.
The amendment has been brought in regulation 26 regarding the appointment of a custodian. Earlier, in case of a gold exchange-traded fund scheme, the assets of the scheme being gold or gold-related instruments where to be kept in custody of a bank that is registered as a custodian with the Board. The new regulation eases this by notifying that these assets can be kept in the custody of a custodian registered with the Board.
Another important amendment comes in regulation 28 (4) that the sponsor or asset management company shall invest not less than one percent of the amount which would be raised in the new fund offer or fifty lakh rupees, whichever is less and such investment shall not be redeemed unless the scheme is wound up. This investment, in such an option of the scheme, shall now be specified by the Board according to the new amendment.
A mutual fund is an investment fund that is professionally managed and pools money from various investors to purchase securities that will give attractive returns upon building a strong portfolio. The working of mutual funds are regulated by SEBI in India and SEBI registration is compulsory since 1993. These funds are invested in various sectors like IT, banks, etc.
These amendments in Mutual Funds regulations have come into force from March 6, 2020.
Subscribe Taxscan Premium to view the Judgment
