In case of open-ended and closed-ended schemes of a new fund offer (NFO), the subscription will be open for up to 15 days from 30 days in case of open-ended schemes and 45 days for close ended scheme. The NFO period in case of ELSS schemes will, however, continue to be governed by guidelines issued by the government, where the maximum period of an initial offering of an MF scheme eligible under the Rajiv Gandhi Equity Savings Scheme (RGESS) will be 30 days. The fund houses will make investment out of the NFO proceeds only on or after the closure of the NFO period and allot units or refund money and dispatch statements of accounts within five business days from the closure of the NFO. All the schemes (except ELSS and RGESS) will be available for ongoing repurchase/sale/trading within five business days of allotment. For funds under RGESS, the period within which AMCs will have to allocate the units or refund the money and issue statements of accounts will be 15 days from the closure of the initial subscription.
The Sebi circular also says that for conversion of closed-ended schemes to open-ended schemes, the disclosures contained in the scheme information document (SID) will be revised and updated and a copy of the draft SID filed with the board as required under Regulation 28(1) of the Mutual Funds Regulations. Also, a draft of the communication to be sent to unitholders will be submitted to the board of the AMC, which will include the the latest portfolio of the schemes in the prescribed format and details of the financial performance of the schemes since inception, along with comparisons with appropriate benchmark.
Analysts say the master circular will bring in more clarity in the way of functioning of AMCs and benefit retail investors in the long run. “Fund houses will have to adhere to the latest guidelines and give adequate disclosures so that retail investors have full understanding of the products before investing in MFs,” says Deepak Goyal, an independent financial advisor.
In case of any consolidation or merger of MF schemes, it