The Securities and Exchange Board of India (SEBI), on October 30, 2024, issued a Consultation paper on specifying timelines for deployment of funds collected by Asset Management Companies (AMCs) in New Fund Offer (NFO) as per asset allocation of the scheme.
The objective of this consultation paper is to seek comments and suggestions from the public on the proposals related to specifying timelines for the deployment of funds collected by Mutual Funds in New Fund Offers (NFO), as per the asset allocation of a scheme.
The proposal addresses the timely deployment of funds collected through New Fund Offerings (NFOs) by Asset Management Companies (AMCs). Currently, delays have been noted in deploying NFO funds due to large corpus size and market volatility. SEBI proposes:
Deployment Timeline: AMCs must deploy NFO funds within 30 business days from allotment. In exceptional cases, with Investment Committee (IC) approval, this may be extended by 30 days.
Rules apply to all NFOs except Index Funds and ETFs.
The comments and suggestions should be submitted through the link by November 20, 2024.
