Circular for Mutual Funds
Summary
This circular mandates that interval schemes must list units and restrict redemptions to specified transaction periods with a minimum duration of 15 days. It establishes uniform cut-off timings for Net Asset Value applicability in liquid and income/debt oriented mutual fund schemes to prevent systemic risk. Additionally, it reinforces the prohibition against encumbering scheme property as per the Fourth Schedule of the SEBI Mutual Funds Regulations.
Text
The units shall be mandatorily listed.
No redemption/repurchase of units shall be allowed except during the specified transaction period... The specified transaction period shall be of minimum 2 working days.
Minimum duration of an interval period in an interval scheme/plan shall be 15 days.
Investments shall be permitted only in such securities which mature on or before the opening of the immediately following specified transaction period.
The AMC shall ensure compliance with the requirements mentioned in Clause 2 from the date of next specified transaction period or April 1, 2011 whichever is later.
where the application is received upto 2.00 p.m. on a day and funds are available for utilization before the cut-off time without availing any credit facility... the closing NAV of the day immediately preceding the day of receipt of application;
where the application is received after 2.00 p.m. on a day and funds are available for utilization on the same day without availing any credit facility... the closing NAV of the day immediately preceding the next business day ;
irrespective of the time of receipt of application, where the funds are not available for utilization before the cut-off time without availing any credit facility... the closing NAV of the day immediately preceding the day on which the funds are available for utilization.
For allotment of units in respect of purchase in liquid schemes, it shall be ensured that: Application is received before the applicable cut-off time. Funds... are credited... before the cut-off time. The funds are available for utilization before the cut-off time without availing any credit facility...
For allotment of units in respect of switch-in to liquid schemes from other schemes, it shall be ensured that : Application for switch-in is received before the applicable cut-off time. Funds... are credited... before the cut-off time. The funds are available for utilization before the cut-off time without availing any credit facility...
For allotment of units in respect of purchase in income/debt oriented mutual fund schemes/plans other than liquid schemes, it shall be ensured that: Application is received before the applicable cut-off time. Funds... are credited... before the cut-off time. The funds are available for utilization before the cut-off time without availing any credit facility...
For allotment of units in respect of switch-in to income/debt oriented mutual fund schemes/plans other than liquid schemes from other schemes, it shall be ensured that: Application for switch-in is received before the applicable cut-off time. Funds... are credited... before the cut-off time. The funds are available for utilization before the cut-off time without availing any credit facility...
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Source: SecMarx — Circular for Mutual Funds. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.