SEBI Tightens Noose on AMCs: Proposes New NFO Timelines

SEBI proposes new timelines for Asset Management Companies in deploying funds from New Fund Offers. Suggested measures include a mandate to deploy funds within 30 days of unit allotment, with penalties for non-compliance. Public comments on these proposals are open until November 20.

The Securities and Exchange Board of India (SEBI) is calling for stricter timelines on Asset Management Companies (AMCs) deploying funds from New Fund Offers (NFO). The regulator proposed that funds must be deployed within 30 business days from the date of unit allotment.

In a bid to enforce accountability, SEBI suggests extensions should only be granted after critical examination by an investment committee. Non-compliance could result in AMCs being barred from launching new schemes and prohibited from levying exit loads on schemes that fail to adhere to the specified timelines.

Taking public feedback into account, SEBI has opened these proposals for comment until November 20, seeking a balance between public scrutiny and industry competitiveness, by tweaking timelines for uploading Scheme Information Documents.

(With inputs from agencies.)