Regulatory updates

The main objective of this consultation paper is to ensure that funds collected during NFOs are deployed promptly and in accordance with the asset allocation specified in the Scheme Information Document (SID). The key proposals are: AMCs may be mandated to deploy the funds garnered in NFO within 60 business days from the date of allotment of units. In exceptional cases, the Investment Committee may extend the timeline by 30 business days
If the AMC fails to deploy the funds within the specified timelines, they may face certain consequences, such as:

• They may not be permitted to launch any new scheme till the time the funds are deployed as per the asset allocation mentioned in the SID.
• not be permitted to levy exit load, if any, on the investors exiting such scheme(s) after 60 business days of not complying with the asset allocation of the scheme.
• report the deviation to Trustees at each of the above stages.

The above provisions may be made applicable to all NFOs other than for Index Fund and Exchange Traded Funds. Public comments on this consultation paper closed on 20 November 2024.

To access the text of the consultation paper, please click here

The objective of this consultation paper is to seek comments on the proposal to reduce the number of days from 21 working days to 5 working days for which the draft Scheme Information Documents (SIDs) submitted by Asset Management Companies (AMCs) are to be made available on SEBI website.

The comments on the consultation paper closed on 20 November 2024.

To access the text click here

The key proposals in this consultation paper are:
Requirement of sharing draft ESG rating report with the issuer in case of ERPs following a subscriber-pays model. Dealing with appeal and representation by the rated issuer in case of ERPs following a subscriber-pays model. Dispensing with the requirement to disclose the ESG ratings to the stock exchange(s) where the issuer or the security is listed, in case of ERPs following a subscriber-pays model. Specifying Activity Based Regulation for ERPs.

Comments on this consultation paper closed on 15 November 2024.

To access the text click here

The key proposals in this consultation paper are as follows:

• Introduction of a separate chapter for corporate governance norms in the LODR Regulations which will be applicable only to HVDLEs;
• Relaxation in the threshold for identification of HVDLEs for applicability of Corporate Governance Norms;
• Introduction of the sunset clause for applicability of Corporate Governance norms;
• Relaxation for HVDLEs which are not companies as per the Companies Act, 2013;
• Relaxation with regard to constitution of the Nomination and remuneration committee (NRC), Risk Management Committee (RMC) and Stakeholders Relationship Committee (SRC);
• Introduction of filing of corporate governance compliance report in XBRL format and harmonization of reporting formats with that specified for equity listed entities;
• Introduction of Business Responsibility and Sustainability Report (BRSR) for HVDLEs on a voluntary basis;
• Requirements related to maximum number of directorships;
• Requirements related to number of memberships or chairpersonships in the committees by a director; and
• Requirements pertaining Related Party transactions (RPT);