Sebi to allows private equity firms to back mutual fund companies
1 min read 29 Mar 2023, 07:37 PM ISTIt has also permitted the set-up of self-sponsored asset management companies (AMCs).
PremiumThe Securities and Exchange Board of India (Sebi) on Wednesday decided to tweak rules governing the mutual fund industry by allowing private equity firms to back Asset Management Companies(AMCs).
It has also permitted the set-up of self-sponsored asset management companies (AMCs).
The Securities and Exchange Board of India (Sebi) said a private equity firm or its manager should have at least five years of experience managing funds and investing in the financial sector, and should have managed committed and drawn-down capital of not less than 50 billion rupees on the date of application.
Currently India only allows financial services firms and corporates to back an AMC.
Market regulator Sebi has also came out with a new time limit for disclosure of net asset value (NAV) of mutual fund schemes investing overseas due to differences in time zones and market hours.
Under the rule, mutual funds are mandated to disclose the NAVs of all schemes within a given outer time limit.
However, to address the difficulties being faced in calculation of NAV for schemes investing overseas due to differences in time zones and market hours, Sebi has made partial modification with regard to timelines for declaration of NAV depending on investment objective and asset allocation of schemes,
The new timeline will come into force from July 1, 2023, the Securities and Exchange Board of India (Sebi) said in a circular.
Sebi will adopt ‘a principles-based, rather than prescriptive’ approach in its first set of rules for rating a company on environment, social and governance (ESG) issues, it said in a statement.
It also announced enhanced disclosures by ESG ratings providers for mutual funds investing on those metrics and for listed companies, while mandating that 65% of assets of ESG focused mutual fund schemes should be in companies which make comprehensive related disclosures.
