Sebi Extends Instant Cash Facility to MF Day-to-Day Financing Programs

Mumbai: The Securities and Exchange Board of India (Sebi) said on Friday that mutual funds can offer ease of instant access under overnight programs. This arrangement allows investors to access their money within hours of their redemption request.

The regulator revised its previous circular which only allowed liquid funds to offer this facility to investors. Now, mutual funds can provide this arrangement for both overnight and liquid plans. Under this facility, investors can instantly withdraw up to $ 50,000. Currently, cash transfers to the unitholder’s bank account take approximately two days for liquid plans and overnight after the redemption request.

Sebi also said that unclaimed redemption and dividend amounts, which are currently only allowed to be deployed in money market instruments, would also be allowed to be invested in a separate mutual fund plan only on a day-to-day basis. day, cash and money.

“Provided that those regimes, where unclaimed redemption and dividend amounts are deployed, are just overnight regimes / liquid regimes / money market mutual funds that are placed in cell A- 1 (relatively low interest rate risk and relatively low credit risk) of the potential risk class matrix, ”Sebi said in a circular.

Separately, the regulator has also clarified the rules on intraday net asset value (NAV) for transactions in shares of exchange-traded funds.

He stated that the intraday net asset value based on the executed price at which the securities representing the underlying index or the commodities are bought or sold, would be applicable.

“Industry that has provided feedback on exchange-traded fund (ETF) unit transactions by authorized participants / large investors directly with AMCs, the“ day-close NAV ”may not be relevant as these Transactions are based on the price at which the securities representing the underlying index or the underlying commodity are bought or sold, ”Sebi said.