Listen to this article
SEBI has proposed reduction of gap between the draft Scheme Information Documents (SID) stage and the launch stage.
In a consultation paper issued today, SEBI has proposed the fund houses will be able to file final SID after 5 working days of uploading of the draft SID made available on SEBI website for public comment.
Currently, fund houses can launch a scheme only after completion of 21 working days from the date of uploading of SID on SEBI website.
The market regulator feels that the reduced waiting period will ensure that the fund houses get the first move advantage. It said, “SEBI has noted instances wherein AMCs which file SID based on new product lose the first mover advantage due to the upload of the initial draft SID on SEBI website. It has been observed that once a draft SID proposing a new product is uploaded on SEBI website, other AMCs tend to follow suit. At times, this leads to a situation where NFO of an AMC which followed suit precedes the NFO of AMC that conceived the idea and the AMC proposing the new product loses its first mover advantage.”
SEBI has also proposed doing away with the requirement of uploading draft SIDs at the initial filing stage. Instead, only the last SID that has received SEBI observations will be uploaded for public comments for 5 working days.
Post that, fund houses can file the final SID and final Key Information Memorandum (KIM) at least two days prior to their NFO.
You can provide your feedback on this consultation paper through the SEBI website by November 20.
