The Securities and Exchange Board of India vides its circular dated 12th June 2020 has modified its framework for asset management companies (AMCs) where the investment shall be made in the growth option of the scheme.
Under the mutual fund norms, the sponsor or AMC is required to invest at least one per cent of the amount which would be raised in the new fund offer (NFO) or Rs 50 lakh, whichever is less in such option of the scheme.
However, the regulator has decided that the above investment shall be made in the growth option of the scheme and for such schemes where growth option is not available, the investment shall be made in the dividend reinvestment option of the scheme.
Further, for such schemes where growth options as well as dividend reinvestment option are not available, the investment shall be made in the dividend option of the scheme.
Click here to read the Notification.
