The regulator has announced a few changes that impact the mutual fund, insurance and PMS industry.
Advertising code made flexible
Advertising rules to be made principle based. Also, the definition of advertisement for mutual funds is broadened to include all forms of communication that may influence investor’s decision.
AMCs had earlier requested SEBI to relax advertisement regulation as the stringent rules laid down by the regulator were resulting in cluttered advertisements. Moreover, the ads were not able to convey the message to investors. “According to the current guidelines, it consumes a lot of space and ads look cluttered and my message gets lost. SEBI is considering relaxing some of the advertisement rules,” a sales head of a top AMC had opined a few weeks back.
Minimum PMS investment raised to Rs. 25 lakh from Rs. 5 lakh
SEBI has also raised the minimum for new investors willing to enjoy portfolio management service (PMS). According to the new rule, minimum investment needed to open a PMS account is Rs. 25 lakh.
Investment valuation norms of debt instruments
Henceforth, if debt and money market securities are not traded on a particular valuation day, then valuation through amortization basis shall be restricted to securities having residual maturity of up to 60 days (currently 91 days), provided such valuation shall be reflective of the realizable value/fair value of the securities.
Waiver of certain Requirements relating to preferential allotment to insurance companies and mutual funds
Insurance Companies and mutual funds have been expted at large from from the provisions of SEBI (Issue of Capital and Disclosure Requirements) Regulations relating to sale and lock-in of their pre-preferential shareholding in the issuer company
Also read: SEBI may relax advertisement rule for mutual funds
