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SEBI’s decision, now the approval of the unit holders will have to be taken before closing the mutual fund scheme

Mumbai, Dec 28 (PTI) The Securities and Exchange Board of India (SEBI) on Tuesday decided to take important steps to protect the interest of mutual fund investors. Under this, whenever a majority trustee of a mutual fund decides to wind up a scheme, it has been decided to make it mandatory for them to take the consent of the unit holders.

The decision was taken in the meeting of the SEBI Board of Directors held on Tuesday.

SEBI will make it mandatory for funds to follow the Indian Accounting Standards (India AS) from the financial year 2023-24 under the amendment to mutual fund regulation.

SEBI said in a release that whenever a majority trustee of a mutual fund decides to discontinue a scheme or for premature encashment of units under a fixed term scheme (close ended scheme), it is necessary for them to obtain the consent of the unit holders. It has been decided to make it mandatory.

According to the release, “The trustees will have to obtain the consent of the existing unit holders on the basis of simple majority. For this, voting will be done on the basis of one vote per unit. The result of the poll will need to be published within 45 days from the date of publication of the notice of the circumstances of the closure of the scheme.

SEBI said that if the trustees fail to do so, the scheme should be open for business activities from the second business day from the date of publication of the result of the poll.

In addition to the requirements of Indian Accounting Standards, SEBI has decided to amend the norms with respect to regulatory provisions relating to audit to remove unnecessary provisions and bring in more clarity.

Meanwhile, in order to enhance the role of KYC (Know Your Customer) Registration Agencies (KRAs), the regulator has decided to fix their responsibility for independent verification by Registered Intermediaries (RIs) of KYC records uploaded on their ‘system’. has decided.

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