The Securities and Exchange Board of India on 9th November 2021 has published the Securities and Exchange Board of India (Mutual Funds) (Third Amendment) Regulations, 2021 which shall come into force from 9th December 2021.
Through this amendment the term Mutual fund defined under regulation 2(1)(q) has been substituted as follows:
“mutual fund” means a fund established in the form of a trust to raise monies through the sale of units to the public or a section of the public under one or more schemes for investing in securities, money market instruments, gold or gold related instruments, silver or silver related instruments, real estate assets and such other assets and instruments as may be specified by the Board from time to time:
Provided that infrastructure debt fund schemes may raise monies through private placement of units, subject to conditions specified in these regulations:
Provided further that mutual fund schemes investing in exchange traded commodity derivatives may hold the underlying goods in case of physical settlement of such contracts.”
Through this amendment regulation 7 which deals with the eligibility criteria for grant of certificate of registration, in which clause (g) has been substituted as follows:
appointment of custodian in order to keep custody of the securities or goods or gold or gold related instruments or silver or silver related instruments or other assets of the mutual fund held in terms of these regulations, and provide such other custodial services as may be authorised by the trustees.
Further, the value of silver under eighth schedule has been inserted as follows:
Value of Silver: The silver held by a silver exchange-traded fund scheme shall be valued at the AM fixing price of London Bullion Market Association (LBMA) in US dollars per troy ounce for silver having a fineness of 999.0 parts per thousand, subject to the following:
- adjustment for conversion to metric measure as per standard conversion rates;
- adjustment for conversion of US dollars into Indian rupees as per the RBI reference rate declared by the Foreign Exchange Dealers Association of India (FEDAI); and
- addition of- (i) transportation and other charges that may be normally incurred in bringing such silver from London to the place where it is actually stored on behalf of the mutual fund; and (ii) notional customs duty and other applicable taxes and levies that may be normally incurred to bring the silver from London to the place where it is actually stored on behalf of the mutual fund:
Provided that the adjustment under clause (c) above may be made on the basis of a notional premium that is usually charged for delivery of silver to the place where it is stored on behalf of the mutual fund:
Provided further that where the silver held by a silver exchange-traded fund scheme has a greater fineness, the relevant LBMA prices of AM fixing shall be taken as the reference price under this sub-paragraph.
