Securities and Exchange Board of India
SEBI (MUTUAL FUNDS) (SECOND AMENDMENT) REGULATIONS, 2012 – Amendment in REGULATIONS 48 & 52 and Twelfth schedule, substitution of REGULATION 59 and insertion of REGULATION 51A
NOTIFICATION No. LAD-NRO/GN/2012-13/17/21502, dated 26-9-2012
In exercise of the powers conferred under section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to amend the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, namely:-
1. These regulations may be called the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2012.
2. These regulations shall come into force on the first day of October, 2012.
3. In the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 —
i. in regulation 48, sub-regulation (2) and the proviso shall be substituted with the following, namely –
“(2) The Net Asset Value of the scheme shall be calculated on daily basis and published in at least two daily newspapers having circulation all over India.”.
ii. after regulation 51, the following new regulation shall be inserted, namely-
“Credit of exit load to scheme.
51A. The exit load charged, if any, after the commencement of the SEBI (Mutual Funds) (Second Amendment) Regulations, 2012, shall be credited to the scheme.”
iii. in regulation 52,-
A. sub- regulation (2) shall be substituted with the following, namely-
“(2) The asset management company may charge the scheme with investment and advisory fees which shall be fully disclosed in the offer document.”.
B. in sub-regulation (4), the words “mutual fund” shall be substituted with the word “scheme”.
C. in sub-regulation (6),-
I. for clause (a), the following shall be substituted, namely-
“(a) in case of a fund of funds scheme, the total expenses of the scheme including weighted average of charges levied by the underlying schemes shall not exceed 2.50 per cent of the daily net assets of the scheme.”.
II. in clause (b), the words “weekly average” shall be substituted with the words “daily”.
III. in clause (c), the words “or average weekly” and “or weekly average” wherever appearing shall be omitted.
D. after sub-regulation (6), the following new sub-regulation shall be inserted, namely-
“(6A) In addition to the limits specified in sub-regulation (6), the following costs or expenses may be charged to the scheme, namely-
(a) brokerage and transaction costs which are incurred for the purpose of execution of trade and is included in the cost of investment, not exceeding 0.12 per cent in case of cash market transactions and 0.05 per cent in case of derivatives transactions;
(b) expenses not exceeding of 0.30 per cent of daily net assets, if the new inflows from such cities as specified by the Board from time to time are at least –
(i) 30 per cent of gross new inflows in the scheme, or;
(ii) 15 per cent of the average assets under management (year to date) of the scheme, whichever is higher:
Provided that if inflows from such cities is less than the higher of sub-clause (i) or sub- clause (ii), such expenses on daily net assets of the scheme shall be charged on proportionate basis:
Provided further that expenses charged under this clause shall be utilised for distribution expenses incurred for bringing inflows from such cities:
Provided further that amount incurred as expense on account of inflows from such cities shall be credited back to the scheme in case the said inflows are redeemed within a period of one year from the date of investment;
(c) additional expenses, incurred towards different heads mentioned under sub-regulations (2) and (4), not exceeding 0.20 per cent of daily net assets of the scheme.”.
D. in sub-regulation (7), the words, symbols and number “sub-regulation (6)” shall be substituted with the words, symbols and numbers “sub-regulations (6) and (6A)”.
iv. for regulation 59, the following shall be substituted, namely-
59. (1) A mutual fund and asset management company shall within one month from the close of each half year, that is on 31st March and on 30th September, host a soft copy of its unaudited financial results on their website:
Provided that the half-yearly unaudited report referred to in this sub-regulation shall contain details as specified in Twelfth Schedule and such other details as are necessary for the purpose of providing a true and fair view of the operations of the mutual fund.
(2) A mutual fund and asset management company, shall publish an advertisement disclosing the hosting of such financial results on their website, in atleast one English daily newspaper having nationwide circulation and in a newspaper having wide circulation published in the language of the region where the Head Office of the mutual fund is situated.”.
v. In Twelfth Schedule, in serial number 6.5, the words and symbols “daily/weekly average” wherever appearing shall be substituted with the word “daily”.