RegAlert2010-10-22
Added
Consolidation or Merger of Schemes
The circular amends SEBI/MFD/CIR No. 05/12031/03 (June 23 2003) so that a merger or consolidation of mutual fund schemes will not be treated as a change in the surviving scheme’s fundamental attributes if (a) the surviving scheme’s fundamental attributes, as defined in SEBI Circular No. IMARP/MF/CIR/01/294/98, remain unchanged, and (b) the fund can demonstrate that the merger is warranted and does not adversely affect unitholders’ interests. After the AMC’s and the trustees’ boards approve the merger, the fund must submit the proposal to SEBI, which will issue observations within the period prescribed by Regulation 29(3) of the SEBI (Mutual Funds) Regulations 1996. A letter to unitholders may be issued only after SEBI’s final observations are incorporated and the final documents are filed with SEBI.
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1
CIRCULAR
Cir / IMD / DF / 15/ 2010 October 22, 2010
All Mutual Funds/Asset Management Companies (AMCs)/ Trustee Companies/Boards of Trustees of Mutual Funds Dear Sir/Madam, Sub: Consolidation or Merger of Schemes Please refer to SEBI Circular No. SEBI/MFD/CIR No. 05 /12031/03 dated June 23, 2003 regarding consolidation or merger of schemes which mandates that the consolidations shall be viewed as changes in fundamental attributes of the related schemes and the mutual funds shall comply with the requirements laid down in the SEBI (Mutual Funds) Regulations, 1996, for the purpose. In order to facilitate merger of schemes, it has been decided that merger or consolidation shall not be seen as change in fundamental attribute of the surviving scheme if the following conditions are met:
- Fundamental attributes of the surviving scheme as per SEBI Circular NoIIMARP/MF/CIR/01/294/98 dated February 4, 1998 do not change. For the
purpose of this circular the surviving scheme means the scheme which remains in existence after the merger. - Mutual Funds are able to demonstrate that the circumstances merit merger or
consolidation of schemes and the interest of the unitholders of surviving scheme is not adversely affected. After approval by the Boards of AMCs and Trustees, the mutual funds shall file such proposal with SEBI. SEBI would communicate its observations on the proposal within the time period prescribed under Regulation 29(3) of SEBI (Mutual Funds) Regulations, 1996. The letter to unitholders shall be issued only after the final observations communicated by SEBI have been incorporated and final copies of the same have been filed with SEBI. SEBI circular No. SEBI/MFD/CIR No. 05 /12031/03 dated June 23, 2003 stands modified to the aforesaid extent. This circular is issued in exercise of powers conferred under section 11(1) of the Securities and Exchange Board of India Act, 1992, read with the provisions of Regulation 77 of SEBI (Mutual Funds) Regulations, 1996 to protect the interests of Investors in securities and to promote the development of and to regulate the securities market. Yours faithfully, RUCHI CHOJER Deputy General Manager, Investment Management Department Telephone -022-26449310 Email : ruchic@sebi.gov.in
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Source: Securities and Exchange Board of India — original document · Summary generated with machine assistance and reviewed before publication; the authoritative text is the regulator's original document. How RegAlert works
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