Regulatory Alerts2025-02-27
SEBI Circular on Timelines for Deployment of Funds in New Fund Offers
The Securities and Exchange Board of India (SEBI) has issued a circular mandating that Asset Management Companies deploy funds collected in New Fund Offers within 30 business days from unit allotment. The regulation allows for a single 30-day extension by the AMC's Investment Committee in exceptional cases, subject to strict monitoring and root cause analysis. Non-compliance triggers penalties including a ban on fresh inflows, prohibition of exit loads, and mandatory investor exit options, while also introducing rules to lower distribution commissions for switch transactions to discourage mis-selling.
Share