Sebi notifies norms on dividend and redemption gains
NEW DELHI: The Securities and Exchange Board of India (Sebi) has notified new rules for asset management companies (AMCs) pertaining to the transfer of dividend and redemption proceeds to unitholders of mutual funds.
The new norms would come into force on January 15.
Under this, every mutual fund and AMC would be required to transfer to the unitholders the dividend payments and the redemption or repurchase proceeds within a period specified by the markets regulator, Sebi said in a notification made public on Thursday.
In case of failure to transfer the proceeds within the specified period, the AMC would be liable to pay interest to the unitholders for the period of such delay.
“Notwithstanding payment of such interest to the unit-holders...the asset management company may be liable for action for failure to transfer the redemption or repurchase proceeds or dividend payments within the stipulated time,” Sebi said.
The market regulator further said that physical despatch of redemption or repurchase proceeds or dividend payments would be carried out only in exceptional circumstances and AMCs would be required to maintain records along with reasons for all such physical despatches.
To give this effect, the regulator has amended the mutual funds rules.
Separately, the regulator has amended norms governing clearing corporations for orderly winding down of such corporations.
According to the new norms, every clearing corporation would be required to ensure that the new framework provides for the timely and orderly settlement or transfer of position and the transfer of the collateral, deposit, margin or any other asset of the members to another recognised clearing corporation that would take over the operations of the clearing corporation.