Financial market regulator Securities and Exchange Board of India (SEBI) has decided to postpone the implementation of the rule of allotting mutual fund units only after the schemes have received the funds till February 1, 2021. SEBI had prescribed that this rule would be implemented from January 1, 2021.
“Upon consideration of the subsequent representation received from AMFI regarding operational challenges, it has been decided to extend the date of applicability of the aforementioned provision to February 1, 2021,” SEBI circular read.
In the old regime, a mutual fund investor could get the same-day net asset value (NAV) of the scheme - regardless of realisation of funds - as long as the investment was under Rs 2 lakh and transaction was completed before cut-off time. However, SEBI’s circular dated September 17 made it clear that from the beginning of 2021, the allotment of units would take place only after the schemes realise the money, irrespective of the transaction size.SEBI also allowed a few relaxations to asset management companies (AMCs) on the trade execution front. The regulator allowed the fund managers to authorise an employee of the AMC to place orders using automated order management system (OMS) subject to fulfilling certain conditions. Also those orders where the fund manager discretion is not required – for example arbitrage transactions, stock lending and borrowing, and passive schemes, need not be placed through OMS, provided the AMC adheres to the norms prescribed by the regulator.