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SEBI extended the timeline seeking comments on the revision of existing norms related to nomination till March 28.
Among the key proposals was doing away with the requirement of making nomination compulsory in joint MF folios. In a consultation paper, SEBI said, “The working group has recommended that the requirement of Nomination may be made optional in case of jointly held folios.”
SEBI proposed these changes to ensure ease of doing business. Earlier, SEBI constituted a Working Group (WG) to recommend measures to simplify & ease compliances under various SEBI regulations. Here are some of the key proposals based on WG’s recommendations:
1) Relaxation in appointment of two fund managers in FoFs
The WG found that appointment of two fund managers in FoFs investing overseas leads to additional cost to the AMCs. Additionally, transactions done by fund managers in overseas market are limited, so a separate fund manager may not be required solely for overseas investment. Further, AMCs already hire research analysts at each security/ sector level.
Based on these observations, SEBI proposed that AMCs can appoint one fund manager to manage such schemes.
2) No exposure limit on equity ETFs/index funds sectoral exposure
SEBI has proposed to exclude ETFs and index funds tracking equity indices from any exposure limit.
Currently, mutual fund schemes are not allowed to invest more than 25% of NAV in group companies of their sponsor. However, for certain sectoral indices, the exposure to single issuer may be more than 25%.
You can send your feedback to SEBI on the consultation paper by visiting this link.
