Deployment of unclaimed redemption and dividend amounts and Instant Access Facility in Overnight Funds
Summary
SEBI permits the deployment of unclaimed redemption and dividend amounts into specific Overnight, Liquid, or Money Market Mutual Fund schemes. Asset Management Companies are prohibited from charging exit loads on these plans and must cap their Total Expense Ratio at 50bps or the direct plan's TER, whichever is lower. The circular also restricts the Instant Access Facility to only Overnight and Liquid Schemes.
Text
The unclaimed redemption and dividend amounts... shall also be allowed to be invested in a separate plan of only Overnight scheme / Liquid scheme / Money Market Mutual Fund scheme floated by Mutual Funds specifically for deployment of the unclaimed amounts.
AMCs shall not be permitted to charge any exit load in this plan and TER (Total Expense Ratio) of such plan shall be capped as per the TER of direct plan of such scheme or at 50bps whichever is lower.
MFs/ AMCs can offer Instant Access Facility (IAF) only in Overnight and Liquid Schemes of the MF.
All the Mutual Funds/AMCs are advised to comply with the changes referred in para (1) above from December 01, 2021. Para (2) is applicable with immediate effect.
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 Regulation 77 of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
Source: SecMarx — Deployment of unclaimed redemption and dividend amounts and Instant Access Facility in Overnight Funds. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.