Mumbai: In a bid to fast-track the approval process for new fund offers (NFOs) of asset management companies, capital market regulator Securities and Exchange Board of India (Sebi) has abolished the concept of routing fund offer documents through the committee of executive directors before getting the chairman’s nod. The documents will now be screened solely by the executive director who oversees mutual funds before seeking the go-ahead from the chairman, a person close to the development said on condition of anonymity.
Of the five Sebi executive directors, K.N. Vaidyanathan now oversees mutual funds. He could not be reached for comment.
Under the old norms, all offer documents needed to be cleared by the committee of executive directors and the absence of even one would delay the process.
“This whole process changed last week, as it often used to delay the launch of funds,” the person said.
“Every fund is launched on the basis of market timing and investor sentiment. If the launch is delayed, the fund may miss the opportunity. In fact, many a time, fund houses were forced to cancel NFOs because of delays in getting Sebi approval,” said another person, who too did not want to be named.
Sebi typically takes up to a month to approve an offer document. “After filing offer documents, when we used to enquire about the status, Sebi officials used to reply by saying that the committee approval could not be taken as some of the executive directors were not available,” said the first person.
Several NFOs are set to hit the market. DSP BlackRock Investment Managers Ltd, Birla Sun Life Asset Management Co. Ltd, Baroda Pioneer Asset Management Co. Ltd, IDBI Asset Management Ltd, Religare Asset Management Co. Ltd and Reliance Capital Asset Management Ltd are among those planning NFOs.
The number of offer documents awaiting approval could not be ascertained as Sebi has stopped publishing details of NFO documents and clearances on its website.