InvestorQ : What are the amendments made by SEBI for mutual fund trustees?
Aishwarya Nimbalkar made post

What are the amendments made by SEBI for mutual fund trustees?

Answer
image
8 months ago
Follow
Earlier this week, the Securities and Exchange Board of India (SEBI) directed mutual fund trustees to secure the consent of unit holders before winding up a scheme or prematurely redeeming units of a close-ended scheme. At present, trustees are allowed to close schemes without the prior consent of the unitholders. The amendment to mutual regulations follows a Supreme Court ruling earlier this year that trustees must take the consent of the unitholders before winding up a scheme or prematurely redeeming units.

The SEBI board also approved an amendment to mutual fund (MF) regulations to mandate MF schemes to follow Indian Accounting Standard (IND AS) from 2023-24. Further, it approved amendments to MF regulations regarding accounting-related regulatory provisions to remove redundant provisions and bring more clarity.

During the meeting, the SEBI board also reviewed the role of KYC registration agencies (KRAs) and approved some amendments. As per the approved amendment, KRAs have been made responsible for independently validating the KYC records uploaded onto their system by the registered intermediary (RI) and maintaining an audit trail of the upload or modification and download of KYC records of the client.

SEBI also decided to set conditions for the offer for sale (OFS) to the public in an IPO where the draft red herring prospectus (DRHP) is filed by the issuer without a track record. According to the new rule, shares offered for sale by selling shareholders, individually or with persons acting in concert, holding more than 20% of the pre-issue shareholding of the issuer, should not exceed more than 50% of their pre-issue shareholding

For those holding less than 20% of the pre-issue shareholding, the shares offered should not exceed more than 10% of the pre-issue shareholding of the issuer. In case of book-built issues, SEBI says, a minimum price band of at least 105% of the floor price would be applicable for all issues opening on or after notification in the official gazette.

SEBI also decided to introduce provisions relating to the appointment or a re-appointment only with the prior approval of the shareholders, of any person, including as a managing director or a whole-time director or a manager, who was earlier rejected by the shareholders at a general meeting.

The market regulator also decided to revise the allocation methodology for non-institutional investors (NIIs). Accordingly, one-third of the portion available to NIIs would be reserved for applicants with application sizes of more than Rs2 lakh and up to Rs10 lakh. Further, two-third of the portion available to NIIs would be reserved for applicants with an application size of more than Rs10 lakh, it says.
142 Views

image
sara Kunju answered.
8 months ago
Follow
The SEBI board also considered and approved the amendments to the SEBI (Foreign Portfolio Investors-FPI) Regulations, 2019, to enable the market regulator to generate unique registration numbers of FPIs on receiving the basic details of the applicants seeking FPI registration from either of SEBI-registered depositories.
74 Views