Securities And Exchange Board Of India (Mutual Funds) Amendment Regulations, 1998

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....use (aa) after clause (a) and before clause (b) shall be inserted namely: "(aa) the applicant is a fit and proper person." 3. in regulation 16, sub-regulation (5) shall be substituted by the following, namely:- "(5) Two thirds of the trustees shall be independent persons and shall not be associated with the sponsors or be associated with them in any manner whatsoever." 4. in regulation 17, in sub-regulation (1), the proviso shall be omitted. 5. in regulation 18- (i) in sub-regulation (18), for the word "continuously" the word "quarterly" shall be substituted. (ii) after sub-regulation (23), a new sub-regulation (24) shall be inserted, namely;- "(24) The independent trustees referred to in sub-regulation (5) of regulation 16 shall give their comments on the report received from the asset management company regarding the investments by the mutual fund in the securities of group companies of the sponsor". 6. in regulation 21, in sub-regulation (1),- (a) a new clause (aa) after clause (a) and before clause (b) shall be inserted namely:- "(aa) the asset management company is a fit and proper person." (b) in clause (c) -, (i) the following words "have not been found guilt....

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....ords "provided the latter investment has been made within one year of the date of the former investment calculated on either side" shall be inserted; (iv) in sub-regulation (12), after clause (b) a new clause (c ) shall be inserted, namely: "(c) a quarterly report to the trustees giving details and adequate justification about the purchase and sale of the securities of the group companies of the sponsor or the asset management company as the case may be, by the mutual fund during the said quarter." 9. in regulation 29, - (i) in sub-regulation (1), after the words "investment decision", the following words shall be inserted, namely: "including the disclosure on maximum investments proposed to be made by the scheme in the listed securities of the group companies of the sponsor."; (ii) in sub-regulation (3), the word "working" shall be inserted after the figure "21"; (iii) after sub-regulation (3), a new sub-regulation (4), shall be inserted as follows, namely: "(4) No one shall issue any form of application for units of a mutual fund unless the form is accompanied by the memorandum containing such information as may be specified by the Board." 10. in regulation 30, in sub....

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....ransactions entered on or after January 15, 1998 only through de-materialised securities." (ii) after sub-regulation (3), a new sub-regulation (4) as follows shall be inserted, namely: "(4) The mutual fund may lend securities in accordance with the Stock Lending Scheme of the Board". 17. in regulation 49, in sub-regulation (4), clause (b), shall be substituted by the following, namely: "(b) the sale price is determined with or without a fixed premium added to the future net asset value which is declared in advance". 18. in regulation 50, in sub-regulation (2) for the words "ten years", the words "eight years" shall be substituted. 19. in regulation 51, in the proviso, for the words "following year.", the words "that financial year." shall be substituted. 20. in regulation 52, - (a) in sub-regulation (4), in clause (b), (i) sub-clause (vii) shall be renumbered as sub-clause (xiii) (ii) after sub-clause (vi), the following sub-clauses shall be inserted namely: "(vii) costs related to investor communication; (vii) costs of fund transfer from location to location; (ix) cost of providing account statements and dividend/redemption cheques and warrants; (x) insurance ....

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....ffer document of a scheme, key information memorandum, abridged half yearly results and annual results" shall be substituted. 26. in the Fifth Schedule, - (i) in clause 1, for the word "or", appearing after the word 'persons' and before the words 'in the interest of special class of unitholders' the word 'as" shall be substituted; (ii) in clause 5, for the word "cash", the words "bank accounts" shall be substituted. 27. in the Sixth Schedule, (i) in clause 9, the following shall be omitted: "distinction between each of them, both legally and in terms of their functions, responsibilities and obligations" (ii) a new clause 9A shall be inserted after clause 9 as follows: "9A. all advertisements containing information regarding performance, advertising yield, return or any scheme detail or inviting subscription to the scheme shall contain disclosures of all the risk factors." 28. in the Seventh Schedule, - (i) in clause 3, after sub-clause (a), an explanation shall be inserted, namely,- "Explanation - "spot basis" shall have same meaning as specified by stock exchange for spot transactions." (ii) after clause 8, a new clause 9 shall be inserted as follows, namely:- "9.....