SEBI has directed mutual fund houses to invest 1% of the total funds raised or Rs.50 lakh..!

SEBI has directed mutual fund houses to invest 1% of the total funds raised or Rs.50 lakh..!

The mutual fund regulator SEBI has directed fund houses to invest 1% of the total funds raised or Rs.50 lakh, whichever is lesser in growth option of their new fund offers (NFOs).

Interestingly,Indian mutual fund houses cannot withdraw this corpus till the closure of their scheme.

In a press release, SEBI said, “The sponsor or asset management company is required to invest not less than one percent of the amount which would be raised in the new fund offer or fifty lakh rupees, whichever is less in such option of the scheme as may be specified by the board.”

SEBI further said, “In this regard, it has been decided that the referred investment shall be made in growth option of the scheme.  For such schemes where growth option is not available the  investment  shall  be  made  in  the  dividend  reinvestment  option  of  the  scheme.  Further, for such schemes where growth option as well as dividend reinvestment option are not available the investment shall be made in the dividend option of the scheme.”

This has come into effect immediately. (June 17, 2020)

 


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