Business   

Close ended MF schemes: SEBI prunes issue expenses

— PHOTO: SHASHI ASHIWAL

MORE TRANSPARENCY: M. Damodaran (right), Chairman, SEBI, with G. Anantharaman, all-time Director, addressing a press conference in Mumbai on Wednesday.

MUMBAI: The Securities and Exchange Board of India (SEBI) board on Wednesday approved the proposal for removal of charging and amortisation of initial issue expense in close-ended mutual fund schemes. Accordingly, henceforth, all mutual fund schemes would meet the sales, marketing and other such expenses connected with sales and distribution of schemes from the entry load.

Consequently, waiver of load for direct applicants will also be available in close-ended schemes. “This would bring in more transparency and better upfront disclosures to the investors in terms of the expenses charged in close-ended schemes,” M. Damodaran, Chairman, SEBI, said at press conference immediately after the board meeting here.

Other than amending the SEBI (Mutual Fund) Regulations, 1996 for removal of initial issue expense in close ended mutual fund schemes, SEBI Board also approved: SEBI (Issue and Listing of Debt Securities) Regulations, 2008; SEBI (Public Offer and Listing of Securitized Debt Instruments) Regulations, 2008; and SEBI (Intermediaries) Regulations, 2008.

The regulations pertain to issue and listing of debt securities which are not convertible, either in whole or in part, into equity instruments, Mr. Damodaran said these regulations had been aimed at reducing time and unnecessary burden of issuance of these securities and according flexibility to issuers to structure their instruments, without diluting areas of regulatory concern.

The key elements of corporate debt issuances will be ensured by SEBI mainly through due diligence exercise by the merchant bankers.

Further if an equity of a company is listed, and such company wishes to issue debt instruments (whether by way of public offering or private placement), as large amount of company related information is already in public domain and material developments are available as per the equity listing agreement on a nearly continuous basis, only minimal incremental disclosures are sufficient.

Printer friendly page  
Send this article to Friends by E-Mail

Stories in this Section

Foreign direct investment norms further relaxed
Close ended MF schemes: SEBI prunes issue expenses
Volvo bus unit on stream
‘IT is time India joins the global e-conomy’
NTC to revive entyce
IOB’s Q3 net up
Sensex extends losses
Rupee edges up
Exchange Rates
Bullion Rates
34 FDI proposals cleared
Hyundai plans mini car in India
Govt. to infuse Rs. 900 cr. in RRBs
Reliance Power to allocate shares today
IMPAL net profit up
NTPC pays 27 p.c. interim
SAIL to supply equipment to HEC
35 p.c. interim from MMTC
Bharti gets additional spectrum
Andhra Bank net profit at Rs. 159 cr.

Copyright © 2008, The Hindu. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu