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The regulator has directed fund houses to keep NFOs open for subscription for at least three working days.
SEBI stated, “To safeguard the interests of investors in securities market, it has been decided that all new fund offers shall remain open for subscription for a minimum period of three working days.”
This provision primarily appears to be for debt NFOs, where the subscription period can be as low as one day in the case of FMPs. Elaborating this further, Sandeep Bagla, CEO of Trust Mutual Fund said, “One-day NFOs are rare and are mostly launched for tactical reasons. Such NFOs could have a negotiated set of investors and small investors may not be able to participate."
He added, "This is a welcoming change and in the best interest of investors.”
In another development, as a part of the go green initiative, the regulator did away with the requirement of filing physical offer documents and asked fund houses to file them only digitally.
The fund houses should file all final offer documents (final SID and final KIM) only digitally by emailing them to imdsidfiling@sebi.gov.in. The regulator clarified that there would be no requirement of filing physical copies with SEBI.
It said, “Based on the consultation with Association of Mutual Funds in India, such submission of all final SID and KIM in digital form shall be made at least two working days prior to the launch of the scheme.”
These provisions are applicable with effect from May 1, 2023.
