The Securities and Exchange Board of India vide its circular dated 20th May 2020 has allowed the listing of mutual fund schemes which are in the process of winding up. This rule shall be followed by all open and close-ended schemes.
As per MF regulations, there are several steps with respect to winding up of mutual fund schemes before the scheme ceases to exist. During this process, such units can be listed and traded on a recognized stock exchange, which may provide an exit to investors.
Further, the units of Mutual Fund schemes which are in the process of winding up in terms of Regulation 39(2)(a) of MF Regulations, shall be listed on the recognized stock exchange, subject to compliance with listing formalities as stipulated by the stock exchange.
However, pursuant to the listing, trading on the stock exchange mechanism will not be mandatory for investors. Rather, if they so desire, they may avail the optional channel to exit provided to them.
The stock exchange shall develop a mechanism along with RTA for trading and settlement of such units held in the form of SoA/ Unit Certificate.
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