Circular, CIR/IMD/DF/10/2014, dated 22nd May, 2014
All
Mutual Funds/Asset Management Companies (AMCs)/
Trustee
Companies/Boards of Trustees of Mutual Funds
Circular on Mutual Funds
A. Cash investments in Mutual Funds
1. SEBI, vide circular no.
CIR/IMD/DF/21/2012 dated September 13, 2012, had permitted cash transaction in
mutual funds to the extent of Rs. 20,000/- per investor, per mutual fund, per
financial year.
2. In partial modification to para
I (1) of the aforesaid circular, it has been decided to increase the limit of
cash transactions in mutual funds from the existing limit of Rs. 20,000/- per
investor, per mutual fund, per financial year to Rs. 50,000/- per investor, per
mutual fund, per financial year, subject to (i) compliance with Prevention of Money Laundering Act, 2002 and
Rules framed there under, the SEBI Circular(s) on Anti Money Laundering (AML)
and other applicable AML rules, regulations and guidelines and (ii) sufficient systems and procedures
in place.
B. Investment/Trading in Securities by Employees of
Asset Management Companies and Trustees of Mutual Funds
1. Please refer to SEBI circular
dated May 08, 2001 and circular dated July 11, 2003, on guidelines for
Investment/Trading in Securities by Employees of Asset Management Companies
(AMCs) and Trustees of Mutual Funds.
2. Considering that since the
issuance of aforesaid guidelines, liquid schemes have emerged as a distinct
category of Mutual Fund scheme having features similar to that offered by Money
Market Mutual Fund (MMMF) schemes, thus, in partial modification to aforesaid
circulars, it has been decided that -
a. In point 1.1 (iii) of the
guidelines for Investment/Trading in Securities by Employees of Asset
Management Companies (AMCs) and Trustees of Mutual Funds, along-with MMMF
schemes, Liquid schemes shall be added in list of securities to which the
aforesaid guidelines do not apply.
b. In point 3 of the aforementioned
guidelines, along-with MMMF schemes, transaction in Liquid schemes shall be
exempted from being reported by employees to compliance officer within 7
calendar days from the date of transaction.
c. In Point 3.2 of the aforesaid
guidelines, which mentions various situations wherein employees of AMC &
Trustees of Mutual Funds shall not purchase or sell units of any schemes, term
'liquid scheme' shall be included along-side MMMF schemes.
This
circular is issued in exercise of the powers conferred under Section 11 (1) of
the Securities and Exchange Board of India Act, 1992, read with the provision
of Regulation 77 of SEBI (Mutual Funds) Regulations, 1996 to protect the
interests of investors in securities and to promote the development of, and to
regulate the securities market.
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