Unit Holders Consent Must To Wind Up Mutual Fund Schemes: SEBI
With a view to protect the interest of mutual fund investors, the Securities and Exchange Board of India (SEBI) on Tuesday approved a move to allow trustees of a fund to obtain consent of unitholders if a majority of the trustees decide to wind up a scheme. take decisions.
As part of the amendment to mutual fund rules, the market regulator will make it mandatory for funds to comply with the Indian Accounting Standards (Ind AS) from 2023-24 onwards. This decision was taken in the board meeting of SEBI.
A statement issued by SEBI said that mutual fund trustees would be required to seek the consent of the unitholders when majority of the trustees decide to close a scheme or prematurely redeem the units of a closed-ended scheme.
“The trustees shall obtain the consent of the unitholders by a simple majority of the unitholders present and voting on a one vote per unit basis and shall publish the results of the vote within 45 days of the publication of the notice of circumstances, which may lead to termination ,” it said.
SEBI further stated that in case the trustees fail to obtain consent, the scheme should be open for business activities from the second business day of publication of the results of the voting.
In addition to the Ind AS requirements, the regulator has decided to amend the norms with respect to regulatory provisions relating to accounting to remove unnecessary provisions and bring in more clarity.
Meanwhile, to enhance the role of KYC Registration Agencies (KRAs), the regulator has decided to make them responsible for independent verification of KYC records uploaded on its system by Registered Intermediaries (RIs).
Further, such agencies will have to maintain an audit trail of uploads/modifications/downloads in respect of KYC records of customers.
“It has also been stipulated that the systems of RIs and KRAs should be integrated so that KYC documents can be transferred seamlessly from RI to KRA,” the statement said.