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Securities and Exchange Board of India (SEBI)

SMD-II(N)/2113/94
April 12 1994

To,

President/Executive Directors
All recognised stock exchanges & Mutual Funds

Dear Sirs,

No 1% listing deposit from Mutual Funds

We invite your attention to our circular letter no. SE/2936 dated April 6 1992 whereby all the stock exchanges were advised to suitably amend their listing agreements as was done by the Bombay Stock Exchange to collect from the companies an amount equivalent to 1% of the amount of subscription to the public and/or to the shareholders of the existing securities for ensuring compliance of the listing requirements including repayment of moneys due to the applicants, despatch of share certificates , payment of brokerage, underwriting commission etc. It is understood that the stock exchanges are also collecting similar deposit from the mutual funds in respect of the schemes floated by them for further subscription.

The question of extending the said requirement to the schemes floated by the mutual funds which are sought to be listed on the stock exchanges has since been reviewed. It is observed that whenever the units are offered to the public pursuant to any scheme, the allotments are made to all the applicants on a firm basis irrespective of the amount collected under the scheme. The occasions where applications are required to be rejected or refunds are to be made, are very rare. The mutual funds have also represented to SEBI that there are virtually no complaints from the investors as regards delay in allotment, refund, despatch of unit certificates etc.

Accordingly the stock exchanges are advised that no deposit be collected from the mutual funds in respect of the schemes floated by them for public subscription which are sought to be listed at the stock exchanges. These instructions may be given effect to immediately.

If for the above purpose, any amendment to the rules, bye-laws and regulations of the stock exchanges are required, respective stock exchanges are advised to do so urgently.

Yours faithfully,
sd/-

R. V. NABAR

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