SEBI clarification to MF/AMCs regarding deployment of unclaimed redemption and dividend amounts and Instant Access Facility in Overnight Funds

The Securities Exchange Board of India through circular dated July 30, 2021 issued to Mutual Funds(MFs) and Asset Management Companies has provided clarification regarding deployment of unclaimed redemption and dividend amounts and Instant Access Facility in Overnight Funds. The circular provides that:

1. The unclaimed redemption and dividend amounts, that are currently allowed to be deployed only in call money market or money market instruments, shall also be allowed to be invested in a separate plan of only Overnight scheme / Liquid scheme / Money Market Mutual Fund scheme floated by Mutual Funds specifically for deployment of the unclaimed amounts.
2. AMCs shall not be permitted to charge any exit load in this plan and TER (Total Expense Ratio) of such plan shall be capped asper the TER of direct plan of such scheme or at 50bps whichever is lower.
3. MFs/ AMCs can offer Instant Access Facility (IAF) only in Overnight and Liquid Schemes of the MF.