INVESTMENT MANAGEMENT DEPARTMENT
SEBI/IMD/CIR No. 9/6016/2004
March 25, 2004
All Mutual Funds Registered with SEBI Association of Mutual Funds in India (AMFI)
Re.: Uniform cut-off timings for applicability of Net Asset Value (NAV) of Mutual Fund scheme(s)/plan(s).
Please refer to SEBI Circular No. SEBI/IMD/8/5611/2004 dated March 19, 2004 on the captioned subject. AMFI has approached SEBI for some clarifications and also for extension of date of implementation of this circular. Accordingly, in order to remove the difficulties in implementing the said circular, the following clarifications are issued in accordance with the provisions of regulation 77 of SEBI (Mutual Funds) Regulations, 1996.
These guidelines for assigning NAV shall come into force as soon as possible but not later than March 30, 2004 (instead of March 25, 2004).
Mutual Funds, shall inform SEBI about the names of their schemes, which fall under the category of “Liquid schemes/plans”, latest by March 29, 2004 (instead of March 23, 2004).
It is clarified that the required addenda to the offer documents of the scheme(s)/plan(s) shall be filed with SEBI by March 29, 2004. For the liquid scheme(s) / plan(s), wherever the criteria prescribed in the annexure to the aforesaid circular has to be disclosed in the offer documents as the investment focus, it is clarified that as long as the said investment focus would be achievable under the existing disclosures on the investment objective of the scheme(s)/plan(s), the same shall not be treated as a change in fundamental attribute of the scheme(s)/plan(s).
With reference to para 2 (B)(i) of the aforesaid circular, in the second sentence, “….. closing NAV of the same day ….” shall be replaced by “….closing NAV of the day immediately previous to the next business day ….” .
With reference to para 2 (B)(ii) of the aforesaid circular, in the second sentence “…. same day’s closing NAV ……” shall be replaced by “….. closing NAV of the day immediately previous to the next business day….”
With reference to para 2(B) of the aforesaid circular i.e. Liquid Scheme(s)/ plan(s), the following shall be inserted at the end : “Further, it is clarified that the day(s) on which the money markets are closed / not accessible, shall not be treated as business day(s)”.
It is clarified that for the purpose of calculating the mark to market component of the portfolio of the liquid scheme(s)/plan(s), money market instruments shall be excluded. Further, the repricing tenor of each of the securities included in the portfolio of the liquid scheme(s)/ plan(s) shall be 1 year or less, as illustrated in the annexure to the aforesaid circular.
All other provisions of the aforesaid circular remain unchanged.