The Securities and Exchange Board of India (SEBI), at its board meeting held on March 29, approved amendments to the collective investment schemes (CIS) norms in order to bring them in line with the regulatory framework governing mutual funds.
"The board approved amendment to SEBI (Collective Investment Schemes)
Regulations, 1999 to strengthen the regulatory framework for collective investment schemes (CIS) in line with mutual fund regulations to remove regulatory arbitrage," the market regulator said.
The key amendments include enhancement of net-worth criteria and requirement of having track record in relevant field as an eligibility requirement for registration as a collective investment management company (CIMC).
CIMC and its group, associates or shareholders are now restricted to 10 percent shareholding or representation on board of another CIMC to avoid conflict of interest, it added.
The amendments also include "mandatory investment" of CIMC and its designated employees in the collective investment schemes to align their interest with that of the CIS.
Among other key changes are rationalization of fee and expenses to be charged to the scheme, and reduction of timelines for offer period of scheme, allotment of units and refund of money to investors.
The regulatory body's board also amended the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for simplification of procedure for transmission of securities.
"The existing threshold limit for simplified documents has been revised from Rs two lakhs to Rs five lakhs for securities held in physical mode per listed issuer and Rs five Lakhs to Rs fifteen lakhs for securities held in dematerialized mode for each beneficiary account," the press release stated.
"Legal Heirship Certificate or its equivalent certificate issued by competent
Government authority will be an acceptable document for transmission of
securities," it added.
The objective behind the amendments is to ensure that uniform processes are followed by the Registrars to an Issue and Share Transfer Agents (RTAs)/listed companies which would further ease the transmission process for investors, SEBI said.