The Securities and Exchange Board of India (SEBI), in its board meeting held in Mumbai on Tuesday, approved among others an amendment to the 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.
Some of the key amendments included 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).
Also, CIMC and its group/ associates/ shareholders will be restricted to 10% shareholding or representation on the board of another CIMC to avoid conflict of interest.
There will be a mandatory investment of CIMC and its designated employees in the Collective Investment Schemes (CIS) to align their interest with that of the CIS.
Also, there will be mandatory requirement of minimum number of investors, maximum holding of a single investor, and minimum subscription amount at the CIS level.
As per the amendment, there has been rationalisation of fee and expenses to be charged to the scheme. And there has been reduction of timelines for offer period of scheme, allotment of units, and refund of money to investors.
The board also approved a proposal to amend the Securities and Exchange Board of India (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 ₹2 lakh to ₹5 lakh for securities held in physical mode per listed issuer, and ₹5 lakh to ₹ 15 lakh for securities held in dematerialised mode for each beneficiary account.
“The legal heirship certificate or its equivalent certificate issued by competent government authority will be an acceptable document for transmission of securities,” SEBI said.
“The objective 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,” the regulator added.
The Board also considered the proposal and approved the amendments to the SEBI (Custodian) Regulations, 1996, to enable SEBI-registered custodians to provide custodial services in respect of silver or silver related instruments held by silver ETFs of mutual funds.
