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In a circular, SEBI has directed fund houses to transfer the redemption/repurchase proceeds to the unitholders within three working days from the date of redemption/repurchase.
However, the timeline in the case of permissible overseas investments is five working days.
The circular said, “For schemes investing atleast 80% of total assets in such permissible overseas investments, the transfer of redemption or repurchase proceeds to the unitholders shall be made within five working days from the date of redemption or repurchase.”
The regulator also directed fund houses to make dividend payments within seven working days from the record date.
Fund houses failing to meet the above timelines will have to pay a penalty of 15% per annum on a pro rata basis.
So far, there was no penalty on settlement of redemption proceeds within 10 days and dividend payment within 30 days.
