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SEBI has extended the timeline for implementation of Rs. 25 crore threshold for direct ETF transactions with AMCs.
Through a circular issued in May, SEBI had asked AMCs not to allow direct ETF transactions of less than Rs. 25 crore from July 1, 2022. This deadline has now been extended to November 1, 2022.
The order was part of 'development of passive funds' circular which was aimed at solving the biggest issues faced by passive funds in India with liquidity being the primary problem in the case of ETFs.
By putting a minimum amount condition in direct transactions, SEBI aimed to increase transactions at exchanges to improve liquidity.
Extension in timeline of KYC verification
The timeline for verification of KYC records of investors has also been pushed by three months. As per the new circular, KYC records of all existing investors will have to completed within 180 days from November 1, 2022. "The validation of all KYC records (new and existing) shall commence from November 1, 2022," the circular stated.
The previous date was August 01, 2022.
