Circular for Mutual Funds

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....schemes are generally referred to as 'interval schemes'. 2. As per the current regulation, there is no restriction on tenure of securities in which interval scheme can invest. This read with daily redemption option may result in asset liability mismatch. In line with the changes made in the SEBI (Mutual Funds) Regulations, 1996 regarding close ended schemes, it has been decided that, henceforth, for all interval schemes/plans i. The units shall be mandatorily listed. ii. No redemption/repurchase of units shall be allowed except during the specified transaction period (the period during which both subscription and redemption may be made to and from the scheme). The specified transaction period shall be of minimum 2 worki....

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....) with amount equal to or more than Rs. 1 crore, irrespective of the time of receipt of application, the closing NAV of the day on which the funds are available for utilization shall be applicable. It is observed that mutual funds are deploying funds without receiving clear funds in the scheme account. As a matter of good practice and to avoid systemic risk, it has been decided to modify certain provisions of the SEBI Circular No. SEBI/IMD/CIR No.11/78450/06 dated October 11, 2006 as per the following details. 2 With regard to Clause 5(1) of SEBI Circular No. SEBI/IMD/CIR No.11/78450/06 dated October 11, 2006 which specifies cut-off timings for liquid fund schemes and plans, it is clarified that for determining the applicable NAV ....

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....efore the cut-off time without availing any credit facility whether intra-day or otherwise, by the respective liquid schemes. c. For allotment of units in respect of switch-in to liquid schemes from other schemes, it shall be ensured that : i. Application for switch-in is received before the applicable cut-off time. ii. Funds for the entire amount of subscription/purchase as per the switch-in request are credited to the bank account of the respective switch-in liquid schemes before the cut-off time. iii. The funds are available for utilization before the cut-off time without availing any credit facility whether intra-day or otherwise, by the respective switch-in schemes. 3 With regard to Clause 6(2A) o....