The Securities and Exchange Board of India vide its notification dated 17th September 2020 has decided that in respect of purchase of units of mutual fund schemes (except liquid and overnight schemes), closing net asset value of the day shall be applicable on which the funds are available for utilization irrespective of the size and time of receipt of such application.
SEBI has directed the asset management companies (AMCs) to put in place a written down policy such as specific activities, role and responsibilities of various teams engaged in fund management, compliance, risk management and back-office, among others, with regard to order placement, execution of order, trade allocation among various schemes and other related matters and it shall ensure that all the schemes and its investors are treated in a fair and equitable manner.
Further, the AMCs shall use an automated Order Management System wherein the orders for equity and equity related instruments of each scheme shall be placed by the fund manager(s) of the respective schemes and all regulatory limits and allocation limits as specified in SID shall be in-built in the OMS to ensure that orders in breach of such limits are not accepted by the OMS. AMCs may further place soft limits for internal control and risk management based on its internal policy. Further, any change in limits specified in OMS shall be subject to the approval of Compliance and Risk Officer.
The Circular shall be applicable with effect from 1st January 2021.
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