The Securities and Exchange Board of India on 16th November 2022, has notified the Securities and Exchange Board of India (Mutual Funds) (Third Amendment) Regulations, 2022 which shall come into force on the sixtieth day from the date of publication of these regulations in the Official Gazette.
Through this amendment regulation 53 which deals with transfer of dividend and redemption proceeds has been substituted as follows:
Every mutual fund and asset management company shall,
(a) transfer to the unitholders the dividend payments within such period as may be specified by the Board from time to time;
(b) transfer to the unitholders the redemption or repurchase proceeds within such period as may be specified by the Board from time to time;
(c) in the event of failure to transfer the redemption or repurchase proceeds or dividend payments within the period specified in clauses (a) and (b), the asset management company shall be liable to pay interest to the unitholders at such rate as may be specified by the Board for the period of such delay;
(d) notwithstanding payment of such interest to the unit-holders under clause (c), the asset management company may be liable for action for failure to transfer the redemption or repurchase proceeds or dividend payments within the stipulated time:
Provided that physical despatch of redemption or repurchase proceeds or dividend payments shall be carried out only in exceptional circumstances and asset management companies shall be required to maintain records along with reasons for all such physical despatches.”
