Mumbai: Market regulator, Sebi has notified new rules that allow launch of two new schemes in a year by mutual fund houses with net worth below Rs 50 crore.
However, such permission would be considered on a case-to-case basis, depending on such Asset Management Companies (AMCs) demonstrating that serious efforts are being made by them to meet the net worth requirements within the prescribed timelines. "... in cases where the Board is satisfied that an asset management company is taking steps to meet the net worth requirement within the specified time, the asset management company may be allowed to launch up to two new schemes per year," Securities and Exchange Board of India (Sebi) said in a notification yesterday. The move will come in force with immediate effect.
Sebi, in February, hiked the minimum net worth requirement for mutual funds to Rs 50 crore from Rs 10 crore in a move to weed out non-serious players and ensure stability of the financial system. The fund houses have been given three years to comply with regulations. At that time, 19 fund houses had net worth below this threshold, but a few of them have since complied with the requirement by increasing their net worth to the desired level.
To help the non-compliant fund houses in the interim period, Sebi allowed such entities to launch two new schemes in a year. The move will help small players like Taurus MF, Parag Parikh Financial Advisory Services MF, Escorts MF, Sahara MF and Quantum Asset Management Company to launch new schemes.
According to industry experts, Sebi had received offer documents from many of these fund houses to launch new schemes but their plans could not materialise.
