Fund houses having net worth of less than Rs. 50 crore can launch new schemes.
SEBI has allowed small fund houses having net worth of less than Rs.50 crore to launch two new schemes a year till the time they meet the mandatory net worth requirement. However, the permission would be given to those AMCs who can demonstrate their seriousness to meet the net worth requirements within the prescribed timelines.
The decision was taken on Wednesday during the SEBI’s board meeting.
In a press release, SEBI said, “It has approved a proposal permitting AMCs who are yet to meet with the revised net worth requirement of Rs.50 crore, to launch a maximum of two schemes per year till the time such AMCs meet with the net worth requirements. Such permission would be considered on a case to case basis, depending on such AMCs demonstrating that serious efforts are being made by them to meet the net worth requirements within the prescribed timelines.”
Earlier, SEBI had restricted a few fund houses from launching new schemes till they raise their net worth to Rs.50 crore. The regulator had given three years to these fund houses to increase their net worth.
According to SEBI data as on February 2014, 19 AMCs have net worth of less than Rs.50 crore. 8 AMCs have net worth between Rs.50 crore to Rs.100 crore while 18 AMCs have net worth of more than Rs.100 crore. The net worth of all AMCs put together is Rs.8399 crore.
SEBI had observed that 11 AMCs having net worth less than Rs. 25 crore have consistently remained below 1% of the total mutual fund industry AUM.
Recently, Motilal Oswal and Religare Invesco had raised their net worth in order to comply with SEBI’s norm.
