In the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, the following amendments were made through SEBI (Mutual Funds) (Amendment) Regulations, 2010 vide Notification No. LAD-NRO/GN/2010-11/13/13945 dated 29th July 2010 with immediate effect.
Regulation 34: Offering Period
No scheme of a mutual fund other than the [initial] offering period of any equity linked savings schemes shall be open for subscription for more than 15 days 45 days.
Regulation 35: Allotment of units & refund of moneys
(3) Any amount refundable under sub-regulation (2) shall be refunded within a period of 5 working days six weeks from the date of closure of subscription list, by Registered post with acknowledgement due and by cheque or demand draft marked “A/c payee” to the applicants.
(4) In the event of failure to refund the amounts within the period specified in subregulation (3), the asset management company shall be liable to pay interest to the applicants at a rate of fifteen per cent per annum from the expiry of 5 working days six weeks from the date of closure of the subscription list.
Regulation 36: Statement of accounts or unit certificates
(1) The asset management company shall issue to the applicant whose application has been accepted, a statement of accounts specifying the number of units allotted to the applicant as soon as possible but not later than 5 working days thirty days from the date of closure of the initial subscription list and/or from the date of receipt of the request from the unitholders in any open ended scheme:
Provided that if an applicant so desires, the asset management company shall issue the unit certificates to the applicant within 5 working days thirty days of the receipt of request for the certificate.
(2) An applicant in a close ended scheme whose application has been accepted shall have the option either to receive the statement of accounts or to hold units in dematerialised form and the asset management company shall issue to such applicant, a statement of accounts specifying the number of units allotted to the applicant or issue units in dematerialized form as soon as possible but not later than 5 working days thirty days from the date of closure of the initial subscription list.
Regulation 52: Limitation on fees and expenses on issue of schemes
(3) For schemes launched on a no load basis, the asset management company shall be entitled to collect an additional management fee not exceeding 1% of the weekly average net assets outstanding in each financial year. [Omitted]
(6) The total expenses of the scheme excluding issue or redemption expenses, whether initially borne by the mutual fund or by the asset management company, but including the investment management and advisory fee shall be subject to the following limits :—
(i) On the first Rs.100 crores of the average weekly net assets 2.5%;
(ii) On the next Rs.300 crores of the average weekly net assets 2.25%;
(iii) On the next Rs.300 crores of the average weekly net assets 2.0%;
(iv) On the balance of the assets 1.75% :
Provided that such recurring expenses shall be lesser by at least 0.25% of the weekly average net assets outstanding in each financial year in respect of a scheme investing in bonds :
Provided further that in case of a fund of funds scheme, the total expenses of the scheme including the management fees shall not exceed 0.75% of the daily or weekly average net assets, depending upon whether the NAV of the scheme is calculated on daily or weekly basis.
Provided further that in case of an index fund scheme, the total expenses of the scheme including the investment and advisory fees shall not exceed one and one half percent (1.5%) of the weekly average net assets.
[The total expenses of the scheme excluding issue or redemption expenses, whether initially borne by the mutual fund or by the asset management company, but including the investment management and advisory fee shall be subject to the following limits:—
(a) in case of a fund of funds scheme, the total expenses of the scheme including the management fees shall be either:-
(i) not exceeding 0.75% of the daily or weekly average net assets, depending upon whether the NAV of the scheme is calculated on daily or weekly basis; or
(ii) it may consist of -
(A)management fees for the scheme not exceeding 0.75% of the daily or weekly average net assets depending upon whether the NAV of the scheme is calculated on daily or weekly basis;
(B) other expenses relating to administration of the scheme;
and
(C) charges levied by the underlying schemes:
Provided that the sum total of (A), (B) and the weighted average of the total expense ratio of the underlying schemes shall not exceed 2.50% of the daily
or weekly average net assets (depending upon whether the NAV of the scheme is calculated on daily or weekly basis) of the scheme.
(b) in case of an index fund scheme or exchange traded fund, the total expenses of the scheme including the investment and advisory fees shall not exceed one and one half percent (1.5%) of the weekly average net assets;
(c) in case of any other scheme-
(i) on the first Rs.100 crores of the daily or average weekly net assets 2.5%;
(ii) on the next Rs.300 crores of the daily or average weekly net assets 2.25%;
(iii) on the next Rs.300 crores of the daily or average weekly net assets 2.0%;
(iv) on the balance of the assets 1.75%:
Provided that in respect of a scheme investing in bonds such recurring expenses shall be lesser by at least 0.25% of the daily or weekly average net assets outstanding in each financial year.”]
Tenth Schedule (X): Amortisation of Initial Issue Expenses for close ended schemes
(e) For schemes floated on a ‘no-load’ basis, the asset management company may levy an additional management fee not exceeding 1% of the NAV. The asset management company may be entitled to levy a contingent deferred sales charge for redemption during the first four years after purchase, not exceeding 4% of the redemption proceeds in the first year, 3% in the second year, 2% in the third year and 1% in the fourth year. [Omitted]
