Regulatory Alerts2026-02-06
Added · Updated
Financing arrangements for CIS and PFs for smooth Transition to T+1 Settlement Cycle
Asset Management Companies and Pension Fund Managers are permitted to avail conventional or Shariah-compliant financing against unit subscriptions for Equity-oriented Collective Investment Schemes and Pension Funds to address cash shortfalls from uncleared banking instruments or conversion requests. The financing tenor is capped at three working days at market-based competitive rates, with the daily facility amount limited to the lower of 10% of the scheme's net assets or the specific cash shortfall. AMCs may also use their own funds to cover these requirements without charging costs, provided they pledge scheme securities and disclose all financing details, including costs and duration, in monthly reports. Trustees must monitor compliance and report any inconsistencies, while AMCs and PFMs submit fortnightly reports detailing the usage and outstanding exposure of such facilities.