The Securities and Exchange Board of India (SEBI) on May 19, 2023, issued a Master Circular for Mutual Funds
This Master Circular aims to protect investors' interests in securities, promote development, and regulate the securities market.
This Master Circular Shall come into force on May 19, 2023, except for the provisions mentioned in Paragraph 5.27 of this Master Circular which shall be applicable with effect from July 01, 2023
The following has been stated namely: -
• It states that in order to achieve effective regulation of the Mutual Fund industry SEBI has been issuing various circulars from time to time, to enable the stakeholders to have access to all the applicable regulatory requirements in one place, the provisions of the said circulars issued till March 31, 2023, are incorporated in this Master Circular for Mutual Funds
• The circulars mentioned in Appendix to this Master Circular shall stand rescinded with the issuance of the Master Circular.
• It further states that with respect to the directions or other guidance issued by SEBI, as specifically applicable to Mutual Funds, the same shall continue to remain in force in addition to the provisions of any other law for the time being in force.
• It states Regardless of this revocation, anything done or any action purported to have been taken under the rescinded circulars, including registrations or approvals granted, fees collected, suspension or cancellation of registrations, any inspection, investigation, inquiry, or adjudication started, or show cause notice issued prior to such revocation, shall be deemed to have been done or taken under the corresponding provisions of the master circular.
• it also states that in case of any penalty, incurred in respect of any violation committed against the rescinded circulars, or any investigation, legal proceeding, or remedy in respect of any such right, privilege, obligation, liability, penalty as aforesaid, shall remain unaffected as if the rescinded circulars have never been rescinded.
• This Master Circular incorporates various provisions namely: -
(i) Filing of Offer Document with the Board
(ii) Updation of SID & KIM
(iii) Conversion and consolidation of schemes, the launch of additional plans, and categorization and Rationalization of mutual funds schemes.
(iv) Risk Management Framework for Mutual Funds
(v) Investors’ Rights and Obligations
(vi) Dividend distribution procedure
• All the entities required to ensure compliance with various provisions shall submit necessary reports as envisaged in this Master Circular on a periodic/ continuous basis.
• This Master Circular is available on the SEBI website at https://www.sebi.gov.in/ under the category “Legal -> Master Circulars”
[Circular No. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2023/74]
