{"id":4864,"date":"2020-03-14T11:54:56","date_gmt":"2020-03-14T06:24:56","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=4864"},"modified":"2020-03-14T12:01:31","modified_gmt":"2020-03-14T06:31:31","slug":"amendments-to-sebi-mutual-funds-regulations-1996","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/amendments-to-sebi-mutual-funds-regulations-1996\/","title":{"rendered":"Amendments in the SEBI (Mutual Funds) Regulations, 1996"},"content":{"rendered":"\n<p>On 6<sup>th<\/sup> March 2020, The Securities and Exchange Board of India through its notification has notified new amendments in Mutual Funds. Mutual Funds under the Securities and Exchange Board of India (Mutual Funds) Regulations,1996 are regulated by SEBI.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/amendments-to-sebi-mutual-funds-regulations-1996\/#Highlights_of_the_Amendments\" >Highlights of the Amendments<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/amendments-to-sebi-mutual-funds-regulations-1996\/#What_is_Mutual_Fund_as_per_SEBI_Mutual_Fund_Regulations1996\" >What\nis Mutual Fund as per SEBI (Mutual Fund) Regulations,1996?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/amendments-to-sebi-mutual-funds-regulations-1996\/#Comparison_of_Pre_and_Post_Amendment_SEBI_Mutual_Funds_Regulations1996_with_implications\" >Comparison of Pre and Post Amendment SEBI\n(Mutual Funds) Regulations,1996 with implications-<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/amendments-to-sebi-mutual-funds-regulations-1996\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Highlights_of_the_Amendments\"><\/span>Highlights of the Amendments<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>SEBI has introduced the Securities and Exchange Board of India <strong>(Mutual Funds) (Amendment) Regulations, 2020<\/strong><sup><a href=\"https:\/\/www.sebi.gov.in\/legal\/regulations\/mar-2020\/sebi-mutual-funds-amendment-regulations-2020_46259.html\"><strong>[1]<\/strong><\/a><\/sup>. The highlights of the Amendments in Mutual Funds are;  <\/p>\n\n\n\n<ul><li>Regulation 26\nconcerning the appointment of a custodian has been amended. <\/li><\/ul>\n\n\n\n<p>Earlier gold\nor gold-related instruments were kept in the custody of a bank. <\/p>\n\n\n\n<p><strong>Post amendment<\/strong>, the new notification specifies that the\nassets can be kept in the custody of a custodian registered with the board.<\/p>\n\n\n\n<ul><li>Another amendment was made in Regulation 28 (4) which notifies that the sponsor or asset management company shall invest not-<\/li><\/ul>\n\n\n\n<ol><li>less than 1% of the amount which would be raised in the new fund offer or<\/li><li>Fifty lakh rupees,<\/li><\/ol>\n\n\n\n<p><strong>Whichever is less.<\/strong><\/p>\n\n\n\n<p>Provided that\nas per the new amendment, the investment made by the sponsor or asset\nmanagement company shall be made as specified by the board. <\/p>\n\n\n\n<div class=\"shadow1\"><strong>Note:<\/strong> The investment shall not be redeemed unless the scheme is wound up.<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_Mutual_Fund_as_per_SEBI_Mutual_Fund_Regulations1996\"><\/span>What\nis Mutual Fund as per SEBI (Mutual Fund) Regulations,1996?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>As per SEBI\n(Mutual Fund) Regulations, 1996, a mutual fund is a fund established in the\nform of a trust to raise money-<\/p>\n\n\n\n<ul><li>By offering the units\nto the public or;<strong><\/strong><\/li><li>A section of the\npublic under 1 or more schemes for investing in securities.<strong><\/strong><\/li><\/ul>\n\n\n\n<p>Investing in\nsecurities includes money market\ninstruments or gold or gold-related instruments or real estate assets.<strong><\/strong><\/p>\n\n\n\n<p>It is a process\nfor pooling the resources by issuing units to the investors and investing funds\nin securities.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Comparison_of_Pre_and_Post_Amendment_SEBI_Mutual_Funds_Regulations1996_with_implications\"><\/span>Comparison of Pre and Post Amendment SEBI\n(Mutual Funds) Regulations,1996 with implications-<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>Prior Amendment<\/strong><\/p>\n\n\n\n<p><strong>As per Regulation 26(1)-<\/strong> As per the regulation, to carry out the custodial service for the scheme of the mutual fund shall appoint a Custodian and shall intimate the same to the board within 15 days from the date of appointment of the custodian.<\/p>\n\n\n\n<p>Provided, in case\nof the Gold Exchange Standard scheme, the gold or gold-related instrument shall\nbe kept in the custody of the bank which shall be registered with the board as\na custodian.<\/p>\n\n\n\n<p><strong>Post Amendment<\/strong><\/p>\n\n\n\n<p><strong>As per the SEBI (Mutual Fund) Amendment Regulations, 2020<\/strong>,<em> In case of a gold exchange-traded fund scheme, the assets of the scheme being gold or gold-related instruments shall be kept in the custody of a custodian, who shall be registered with the board.<\/em><\/p>\n\n\n\n<p><strong>Prior Amendment<\/strong><\/p>\n\n\n\n<p><strong>As per Regulation 28(4)-<\/strong> As per the regulation,the sponsor or asset management company in case of new mutual funds were supposed to invest a minimum specified percentage. It was applicable only in the growth option scheme. <\/p>\n\n\n\n<div class=\"shadow1\"><strong>Note:<\/strong> However, these restrictions did not apply to close-ended schemes.<\/div>\n\n\n\n<p><strong>Post Amendment<\/strong><\/p>\n\n\n\n<ul><li>There was no such restrictions post amendment. The sponsor or asset management shall invest not-<\/li><\/ul>\n\n\n\n<ol><li>less than 1% of the amount which would be raised in the new fund offer or<\/li><li>Fifty lakh rupees,<\/li><\/ol>\n\n\n\n<p><strong>Whichever is less<\/strong><\/p>\n\n\n\n<p>Provided that as per the new amendment, the\ninvestment made by the\nsponsor or asset management company shall be made as specified by the board. <\/p>\n\n\n\n<p><strong>Also, the\ninvestment shall not be redeemed unless the scheme is wound up.<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Mutual Fund investment is one of the avenues available to the investor for investment. The Mutual Fund investment is a process of pooling the resources by offering units to the public\/investors. The working of the mutual fund is directed and regulated by the Securities Exchange Board of India. After taking consideration of the loopholes of the mutual fund regulations, SEBI has notified the above-mentioned amendment, which will mainly result in investor satisfaction. <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/steps-taken-by-rbi-and-sbi-against-yes-bank-crisis\/\">\nSteps Taken By RBI And SBI Against Yes Bank Crisis<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>On 6th March 2020, The Securities and Exchange Board of India through its notification has notified new amendments in Mutual Funds. Mutual Funds under the Securities and Exchange Board of India (Mutual Funds) Regulations,1996 are regulated by SEBI. Highlights of the Amendments SEBI has introduced the Securities and Exchange Board of India (Mutual Funds) (Amendment) [&hellip;]<\/p>\n","protected":false},"author":12,"featured_media":4867,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[153],"tags":[399],"acf":{"service_id":"215"},"authorName":"Priyanka Bajpayee","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/03\/IMG-20220303-WA0005.jpg","authorDescription":"A Company Secretary together with PG in international Business, she has gained significant experience as legal content writer. She has keen interest in doing research and writing on legal and financial subject matters. She also holds work experience in legal compliances.","postViews":5370,"readingTime":3,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/4864"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=4864"}],"version-history":[{"count":13,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/4864\/revisions"}],"predecessor-version":[{"id":4880,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/4864\/revisions\/4880"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/4867"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=4864"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=4864"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=4864"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}