Mutual funds can now pre-maturely wind up a close-ended scheme if investors give their consent.
The decision was taken in a SEBI Board Meeting on Tuesday.
The decision paves way for mutual funds to wind up close-ended schemes ahead of the decided time if they sense a market correction due to pricey valuations or expect an upcoming event to push markets down.
SEBI said that mutual funds can proceed to wind up a scheme (both open ended and close ended) if majority of the trustees decide to do so and they take the consent of unitholders.
"The trustees shall obtain consent of the unitholders by simple majority of the unitholders present and voting on the basis of one vote per unit held and publish the results of voting within 45 days of the publication of notice of circumstances leading to winding up," SEBI said.
"In case the trustees fail to obtain the consent, the scheme shall open for business activities from the second business day after publication of results of voting," the regulator added.
Role of KRAs enhanced
SEBI has enhanced the role of KYC Registration Agencies (KRAs) by making them responsible for carrying out independent validation of the KYC records uploaded onto their system by the Registered Intermediary (RI).
"It has also been prescribed that the systems of the RIs and KRAs should be integrated to facilitate seamless movement of KYC documents to and from RIs to KRAs," SEBI said.
Ind AS made mandatory
From FY 2023-24 onwards, mutual funds will have to follow the Indian Accounting Standard (IND AS).
The SEBI Board also amended regulations related to accounting practices to "remove redundant provisions and to bring more clarity".
