SEBI has vide its detailed circular dated 4th March, 2021 revamped quite a lot of procedural formalities/ documentation etc. with respect to mutual funds.
These can be broadly classified into : – Gross Exposure Limits, Investment Pattern, Procedure for change in control of AMC, Go Green Initiatives, AMC annual report to unit holders, filing of AIR by mutual funds, investment in securities by employees of AMCs and trustees of mutual funds, advertisement, disclosure of performance of mutual funds, undertaking from trustees for new scheme document, key personnel of AMC, updation of scheme information document (SID) and key information memorandum (KIM), disclosure of votes cast by mutual funds, dividend distribution procedure, postal ballot, exit period for unit holders, models of payments and despatch, timelines for issuance of CAS etc.
In Gross exposure limits, it says : – “The cumulative gross exposure through equity, debt, derivative positions (including commodity and fixed income derivatives), repo transactions and credit default swaps in corporate debt securities, Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs), other permitted securities/assets and such other securities/assets as may be permitted by the Board from time to time should not exceed 100% of the net assets of the scheme.”
On Investment Pattern : – The tentative portfolio break-up of Equity, Debt, Money Market Instruments, other permitted securities and such other securities as may be permitted by the Board from time to time with minimum and maximum asset allocation, while retaining the option to alter the asset allocation for a short term period on defensive considerations.
On annual report for unit holders : – “The annual report containing accounts of the AMC should be displayed on the websites of the mutual funds immediately after approval in Annual General Meetings within a period of four months, from the date of closing of the financial year. It should also be mentioned in the annual report of mutual fund schemes that the unitholders, if they so desire, may request for the annual report of the AMC. Further, the annual report of AMCs shall be displayed on their websites in machine readable format.
On annual information return by mutual funds : – “Mutual funds are required to submit the Annual Information Return (AIR)
under section 285 BA of the Income Tax Act, and various guidelines notified by Central Board of Direct Taxes (CBDT). As per this requirement, Trustees of Mutual Funds or such other person managing the affairs of the Mutual Funds (as may be duly authorized by the trustees in this behalf) have to report specified financial transactions through electronic medium to Income Tax
Department giving PAN of the transacting parties in an Annual Information Return (AIR).”
On disclosure of votes cast by mutual funds : – “AMCs shall be required to make disclosure of votes cast on their website (in
machine readable spreadsheet format) on a quarterly basis, within 10 working days from the end of the quarter as per the format enclosed. A detailed report in this regard along with summary thereof shall also be disclosed on their website. The format for disclosure of vote cast by Mutual Funds in respect of resolutions passed in general meetings of the investee companies and the
format for presenting summary of votes cast by Mutual Funds is placed as Annexure B. Further, AMCs shall provide the web link in their annual reports regarding the disclosure of voting details.”
On Auditor of a mutual fund: – “The auditor of a mutual fund, appointed in terms of Regulation 55 (1) of MF Regulations shall be a firm, including a limited liability partnership, constituted under the LLP Act, 2008.”
All other changes, you can read from the link given below