Timelines for transfer of dividend and redemption proceeds to unitholders
Summary
This circular mandates specific timelines for the transfer of dividend and redemption proceeds to mutual fund unitholders. It requires dividend payments within seven working days of the record date and redemption proceeds within three to five working days depending on investment type. Additionally, it imposes a 15% per annum interest penalty on Asset Management Companies for any delays in these transfers.
Text
the record date shall be two working days from the issue of public notice, wherever applicable, for the purpose of payment of dividend.
The payment of dividend to the unitholders shall be made within seven working days from the record date.
The transfer of redemption or repurchase proceeds to the unitholders shall be made within three working days from the date of redemption or repurchase.
For schemes investing atleast 80% of total assets in such permissible overseas investments, the transfer of redemption or repurchase proceeds to the unitholders shall be made within five working days from the date of redemption or repurchase.
AMFI, in consultation with SEBI, shall publish a list of exceptional circumstances for schemes unable to transfer redemption or repurchase proceeds to investors within time as stipulated at II (a) and II (b) above... The list shall be published within 30 days of issuance of this circular.
Interest for the period of delay in transfer of redemption or repurchase or dividend shall be payable to unitholders at the rate of 15% per annum along with the proceeds... Such Interest shall be borne by AMCs.
The details of such payments shall be sent to SEBI as part of Compliance Test Reports in the format placed at Annexure A. Investors shall also be informed about the rate and amount of interest paid to them.
Source: SecMarx — Timelines for transfer of dividend and redemption proceeds to unitholders. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.