The Securities and Exchange Board of India vide its notification dated 2nd February 2021 has issued guidelines for setting up of limited purpose clearing corporation (LPCC) by asset management companies, making it obligatory for them to contribute towards the share capital of such entities.
The AMCs shall contribute INR 150 Cr. towards share capital of LPCC in proportion to the Asset Under Management of open-ended debt oriented mutual fund schemes (excluding overnight, gilt fund, and gilt fund with 10-year constant duration but including conservative hybrid schemes) managed by them.
The contribution shall be based on average AUM of debt oriented schemes for the financial year 2019-20.
Further, the AMCs shall ensure that the net worth as prescribed under Mutual Funds norms is maintained over and above the contribution made towards setting up of the LPCC.
