Addendum to SEBI Circular on Development of Passive Funds
Summary
This circular serves as an addendum to SEBI's May 2022 directive on the development of passive funds. It specifically postpones the effective date for Clause 2(IV)(A) regarding direct ETF transactions from July 1, 2022, to November 1, 2022. The delay addresses stakeholder feedback concerning implementation challenges associated with the INR 25 Cr threshold for such transactions.
Text
This has reference to SEBI circular No. SEBI/HO/IMD/DOF2/P/CIR/2022/69 dated May 23, 2022 on “Development of passive funds”. The provisions of the said circular are applicable with effect from July 01, 2022.
Clause 2(IV)(A) of the aforesaid circular prescribed that in respect of units of ETFs, direct transaction with AMCs shall be facilitated for investors only for transactions above a specified threshold of INR 25 Cr.
Considering the feedback received from stakeholders expressing certain challenges with respect to implementation of the above clause, it has been decided that the applicability of clause 2(IV)(A) of the circular shall be November 01, 2022.
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 the provision of Regulation 77 of SEBI (Mutual Funds) Regulation, 1996 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
Source: SecMarx — Addendum to SEBI Circular on Development of Passive Funds. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.