Mutual Funds: New rules on dividend, redemption proceeds notified by SEBI

“Notwithstanding the payment of such interest to the holders of units… the asset management company liable to action for failure to transfer the redemption or repurchase proceeds or dividend payment within the stipulated time,” Sebi said in the circular notified on Thursday. Might be possible.”

It further said that physical remittance of redemption or buyback proceeds or dividend payment shall be done only in exceptional circumstances and the AMC shall be required to maintain records along with the reasons for all such physical remittances. The regulator has amended to give effect to mutual funds The rules and new norms will come into effect from January 15.

Further, SEBI has amended the Alternative Investment Fund (AIF) regulations to prescribe a time limit for declaring early closure of a scheme of an AIF. The commitment provided by the Sponsor Manager at the time of announcement of First Close, to the extent of meeting the above minimum corpus requirement, shall not be reduced or reverted or transferred after First Close.

“If the alternative investment fund fails to declare the earlier closure of the scheme in the prescribed manner, it shall file a fresh application for launch of the scheme by paying the requisite scheme fee,” the regulator said.

In another circular in September this year, the capital markets regulator extended two-factor authentication (2FA) for subscription transactions in units of mutual funds to protect the interests of investors.

In October 2021, the Securities and Exchange Board of India (SEBI) introduced several measures to prevent third party payments and protect the interests of unitholders. In a circular issued in September, SEBI said, “One of the factors for such two-factor authentication for non-demat transactions shall be a one-time password sent to the unit holder on his email/phone number registered with the AMC.” ./RTA.”