Clarifications on SEBI (Mutual Funds) Regulations, 1996 and Gazette Notification dated December 8, 1999

MFD/CIR/09/014/2000 · 2000-01-05 · SEBI Mutual Funds Department

Summary

This document part contains a SEBI circular dated January 5, 2000, providing clarifications on investment restrictions and AMC/Trustee responsibilities. It includes the text of the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 1999, published in the Gazette of India on December 8, 1999. The regulations amend definitions, reporting requirements for trustees, and conditions for changing fundamental attributes of open-ended schemes. This section outlines specific duties for trustees and independent directors regarding governance, ethics, and fee scrutiny. It introduces amendments to various regulations defining net worth, change in control procedures, and disclosure requirements for mutual funds. Additionally, it establishes investment limits for debt and equity instruments and mandates high standards of integrity and advertising practices. This section outlines the specific compliance certificate requirements for Asset Management Companies (AMCs) to submit to Trustees on half-yearly and bi-monthly bases. It details the broad coverage of reports that Trustees must submit to SEBI regarding scheme performance, AMC activities, and regulatory compliance. T

Text

All investment restrictions shall be applicable at the time of making investment.

investments by index funds shall be in accordance with the weightage of the scrips in the specific index as disclosed in the offer document.

the upper ceiling on investments may be in accordance with the weightage of the scrips in the representative sectoral index/sub index as disclosed in the offer document or 10% of the NAV of the scheme whichever is higher.

all information and documents relating to the compliance process shall be authenticated / adopted by the Board of Directors of the AMC.

Trustees shall review all information and documents received from the AMC as required under the compliance process.

All asset management companies shall adopt a management information system for reporting to their trustees.

The half-yearly report on the activities of the mutual fund to be submitted by the trustees to SEBI under Regulation 18(23)(a), shall cover all issues relevant to operation of the mutual fund including those given in Annexure II.

the report must mention that the trustees have satisfied themselves about the adequacy of compliance systems in the mutual fund.

For effective discharge of responsibilities under the Regulations, the AMC shall provide infrastructure and administrative support to the trustees.

only those transactions are required to be reported which exceed the value of Rs 1 lakh.

`Trustees' mean the Board of Trustees or the Trustee Company who hold the property of the Mutual Fund in trust for the benefit of the unitholders.

Each trustee shall file the details of his transactions of dealing in securities with the Mutual Fund on a quarterly basis.

Source: SecMarx — Clarifications on SEBI (Mutual Funds) Regulations, 1996 and Gazette Notification dated December 8, 1999. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.