SEBI modifies Net Asset Value (NAV) rules with respect to the purchase of units of mutual fund schemes (except liquid and overnight schemes). SEBI instructs that the closing NAV of the day shall be applicable on which the funds are available for utilisation irrespective of the size and time of receipt of such application. In addition, existing provision on NAV applicability for liquid and overnight funds and cut-off timings for all schemes will remain unchanged.
The respective modification will be applicable from January 1, 2021.
SEBI further directs Asset management companies to put in place a written down policy which inter-alia detail the specific activities, role and responsibilities of various teams engaged in fund management, dealing, compliance, risk management, back-office, etc., with regard to order placement, execution of order, trade allocation amongst various schemes and other related matters.
Furthermore, SEBI states that policy should be approved by the Board of AMC and the trustee and they would ensure about the compliance w.r.t
- For order pertaining to equity and equity related instruments, AMCs should use an automated Order Management System and the orders for equity and equity related instruments of each scheme should be placed by the fund manager(s) of the respective schemes.
- Requirement with respect to investments in all instruments, wherein it has been instructed that all the conversations of the dealer should be only through the dedicated recorded telephone lines and no mobile phones or any other communication devices other than the recorded telephone lines should be allowed inside the dealing room.
- Monitoring of Compliance, wherein SEBI directs AMC to have system based monitoring mechanism. In addition, an audit trail of activities related to order placement, trade execution and allocation should be available in the system. Further, there should be time stamping with respect to order placed by fund manager, order placed by dealer, order execution and trade allocation.
Below is the link of the circular :-