THE GAZETTE OF INDIA
EXTRAORDINARY
PART III – SECTION 4
PUBLISHED BY AUTHORITY
NEW DELHI, AUGUST 19, 2013
SECURITIES AND EXCHANGE BOARD OF INDIA
NOTIFICATION
Mumbai, the 19th August, 2013
SECURITIES AND EXCHANGE BOARD OF INDIA
(MUTUAL FUNDS) (THIRD AMENDMENT) REGULATIONS, 2013

No. LAD-NRO/GN/2013-14/18/6384 – In exercise of the powers conferred by section 30, read with clause (c) of sub-section (2) of section 11 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to further 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) (Third Amendment) Regulations, 2013.

2. They shall come into force on the date of their publication in the Official Gazette. 3. In the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, ─ (I) in regulation 24, in clause (b), the following proviso shall be inserted, namely-

“Provided further that the asset management company may become a proprietary trading member for carrying out trades in the debt segment of a recognised stock exchange, on behalf of a mutual fund.”

(II) in regulation 26, in sub-regulation (2), the following proviso shall be inserted, namely-

“Provided that where the sponsor or its associates hold 50 per cent or more of the voting rights of the share capital of the custodian, such custodian may act as custodian for a mutual fund constituted by the same sponsor or any of its associates or subsidiary company if:

(i) the sponsor has a net worth of at least twenty thousand crore rupees at all points of time;

(ii) 50 per cent or more of the directors of the custodian are those who do not represent the interest of the sponsor or its associates;

(iii) the custodian and the asset management company of a mutual fund are not subsidiaries of each other;

(iv) no person is a director of both the custodian and the asset management company of a mutual fund; and

(v) the custodian and the asset management company of a mutual fund sign an undertaking that they will act independently of each other in their dealings with the scheme.”

U.K. SINHA
CHAIRMAN
SECURITIES AND EXCHANGE BOARD OF INDIA

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