Mumbai The Securities and Exchange Board of India (SEBI) on Tuesday approved amendments to the rules governing Collective Investment Schemes (CIS) to strengthen the framework and allow them to do away with “regulatory arbitrage” between pooled investment vehicles. To be brought at par with mutual fund regulations. The CIS allows a group of people to deposit money in the property. Returns are divided based on the proportion of the investment. It is a deposit investment vehicle for closed-end funds and the units of the schemes must be listed on an exchange.
The market regulator said that the SEBI board approved an increase in the net worth criteria and requirements to have a track record in the relevant sector to be eligible for the registration of a Collective Investment Management Company (CIMC). Shareholders are not permitted to hold more than 10% of the shares, directly or indirectly, in CIMC, or have representation on its Board.
The regulator also said that investment of CIMC and its employees is mandatory in collective schemes to align their interests with that of CIS. It also states that there must also be a minimum number of investors at the CIS level.
The Board permitted SEBI-registered custodians to provide custodial services for silver or silver-related instruments held by silver exchange-traded funds.
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