News From Press Sebi clears ambiguity on seed capital investment required for NFO

Sebi clears ambiguity on seed capital investment required for NFO

Source: Business Standard Jun 13, 2020

The Securities and Exchange Board of India (Sebi) issued a circular on Friday, clarifying that mutual funds (MFs) should prioritise the ‘growth option’, when investing the minimum seed capital in a new fund offer (NFO).

In a recent amendment, Sebi said that a fund house was required to “invest not less than 1 per cent of the amount raised in an NFO, or Rs 50 lakh (whichever is lower)” in an option specified by the MF’s board.

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