Also, the regulator has tweaked the framework with respect to treatment of unclaimed redemption and dividend amounts
Topics
SEBI | asset management companies | AMC
Markets regulator Sebi on Friday allowed asset management companies to offer instant access facility in overnight mutual fund schemes. Earlier, Asset Management Companies (AMCs) were allowed to offer such a facility only in liquid schemes.
Instant Access Facility (IAF) facilitates credit of redemption proceeds in the bank account of the investor on the same day of redemption request. In a circular, Sebi said “MFs/ AMCs can offer Instant Access Facility (IAF) only in overnight and liquid schemes of the MF”.
Also, the regulator has tweaked the framework with respect to treatment of unclaimed redemption and dividend amounts.
Sebi said the unclaimed redemption and dividend amounts that are currently allowed to be deployed only in call money market or money market instruments, can also be invested in a separate plan of only overnight, liquid and money market mutual fund schemes floated by mutual funds specifically for deployment of the unclaimed amounts.
This is subject to the condition that such schemes where the unclaimed redemption and dividend amounts are deployed will be only those overnight, liquid and money market mutual fund schemes which are placed in A-1 cell — relatively low interest rate risk and relatively low credit risk– of potential risk class matrix.
The regulator said the framework related to IAF will be applicable with immediate effect while those pertaining to unclaimed redemption and dividend amounts will come into effect from December 1.
In market parlance, overnight funds are debt funds that invest in overnight assets, or securities with a residual maturity of one day. Such funds invest in CBLOs (Collateralised Borrowing and Lending Obligations), overnight reverse repos, and other debt or money market securities that mature in one day.
Liquid mutual fund is a debt fund which invests in fixed-income instruments like commercial paper, government securities, treasury bills, among others, with a maturity of up to 91 days.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
First Published: Sat, July 31 2021. 00:15 IST
read the full story about Sebi allows AMCs to offer instant access facility in overnight MF schemes
#theheadlines #breakingnews #headlinenews #newstoday #latestnews #aajtak #ndtv #timesofindia #indiannews