SEBI allows AMCs to offer instant access facility in ‘Overnight Mutual Fund Schemes’: SEBI
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- Last Updated on 2 August, 2021
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EBI/HO/IMD/IMD-II DOF3/P/CIR/2021/608, Dated 30.07.2021
To promote the development and to regulate the securities market, the Markets regulator has allowed asset management companies to offer instant access facilities in overnight mutual fund schemes. Earlier, Asset Management Companies were allowed to offer such a facility only in liquid schemes.
In addition to the above, the regulator has also discussed the framework concerning the treatment of unclaimed redemption and dividend amounts.
As per the new framework, the unclaimed redemption and dividend amounts that are currently allowed to be deployed only in call money market or money market instruments can also be invested in a separate plan of only overnight, liquid, and money market mutual fund schemes floated by mutual funds specifically for the deployment of the unclaimed amounts.
This is subject to the condition that such schemes where the unclaimed redemption and dividend amounts are deployed will be only those overnight, liquid, and money market mutual fund schemes that are placed in A-1 cell (relatively low-interest rate risk and relatively low credit risk) of potential risk class matrix.
On the contrary, the SEBI has clarified that the framework related to IAF will be applicable with immediate effect while those pertaining to unclaimed redemption and dividend amounts will come into effect from December 01, 2021
Read Full Circular Here
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