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Tuesday, June 24, 2014

Sebi announces change in Minimum AUM of Debt Oriented Schemes

Minimum subscription at the time of NFO shall be at least Rs 20 crore 

Sebi has announced that the minimum subscription amount of debt oriented and balanced schemes at the time of new fund offer (NFO) shall be at least Rs 20 crore and that of other schemes shall be at least Rs 10 crore. 

The market regulator said that it has been observed that many debt oriented schemes are operating with a very low AUM. In the interest of investors, it is important that debt oriented schemes have an adequate corpus to ensure adherence to the investment objectives as stated in Scheme Information Document and compliance with investment restrictions specified under Sebi (Mutual Funds) Regulations, 1996. 

Sebi said, an average AUM of Rs 20 crore on half yearly rolling basis shall be maintained for open ended debt oriented schemes. The existing open ended debt oriented schemes shall comply with point (b) stated above within one year from the date of issue of this circular. In case of breach of points above, the AMC shall scale up the AUM of such scheme within a period of six months so as to comply with point (b) stated above, failing which the provisions of Regulation 39 (2) (c) of SEBI (Mutual Funds) Regulations, 1996 would become applicable. 

The confirmation on compliance of the above shall be reported to SEBI in the Half Yearly Trustee Reports.
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