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THE GAZETTE OF EXTRAORDINARY PART –III – SECTION 4 PUBLISHED BY AUTHORITY SECURITIES AND EXCHANGE BOARD OF NOTIFICATION Mumbai, SECURITIES AND EXCHANGE BOARD OF (MUTUAL FUNDS) (SECOND AMENDMENT) REGULATIONS, 2007 No. 11/LC/GN/2007/4646 – In exercise of
the powers conferred by section 30 of the Securities and Exchange Board of
India Act, 1992 (15 of 1992), the Board hereby makes the following Regulations
to further amend the Securities and Exchange Board of India (Mutual Funds)
Regulations, 1996, namely :- 1.
These regulations may be called the Securities and Exchange
Board of India (Mutual Funds) (Second Amendment) Regulations, 2007. 2.
(1) The provisions of clauses (ii), (iii) and (v) of regulation
3 shall come into force on such date as may be specified by the Board by
notification in the Official Gazette. (2)
All other provisions of these regulations shall come into
force on the date of their publication in the Official Gazette. 3.
In the Securities and Exchange Board of (i)
in regulation 2, after clause (mm), the following clause
shall be inserted, namely:- “(mn) ‘index fund
scheme’ means a mutual fund scheme that invests in securities in the same
proportion as an index of securities;” (ii)
in regulation 44, for sub-regulation (4), the following
sub-regulation shall be substituted, namely:- “(4) A mutual fund
may lend and borrow securities in accordance with the framework relating to short
selling and securities lending and borrowing specified by the Board.” (iii)
for regulation 45, the following regulation shall be
substituted, namely:- “Carry forward transactions, derivatives
transactions and short selling transactions. 45.
(1) The funds of
a scheme shall not in any manner be used in carry forward transactions: Provided that a
mutual fund may enter into derivatives transactions on a recognized stock
exchange, subject to the framework specified by the Board. (2) A mutual fund
may enter into short selling transactions on a recognized stock exchange,
subject to the framework relating to short selling and securities lending and
borrowing specified by the Board.” (iv)
in regulation 52, - a.
after sub regulation (2), the following proviso shall be
inserted, namely:- “Provided that in case of an index fund
scheme, the investment and advisory fees shall not exceed three fourths of one
percent (0.75%) of the weekly average net assets.“ b.
in sub regulation (6), after the second proviso, the
following new proviso shall be inserted, namely:- “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.” (v)
in the Seventh Schedule, for clause 6 and the proviso
thereto, the following clause and provisos shall be substituted, namely:- “6. Every mutual fund shall buy and sell
securities on the basis of deliveries and shall in all cases of purchases, take
delivery of relevant securities and in all cases of sale, deliver the
securities: Provided that a
mutual fund may engage in short selling of securities in accordance with the framework
relating to short selling and securities lending and borrowing specified by the
Board: Provided further
that a mutual fund may enter into derivatives transactions in a recognized
stock exchange, subject to the framework specified by the Board.” M. DAMODARAN CHAIRMAN SECURITIES AND EXCHANGE BOARD OF [ADVT
III/IV/69-ZB/2007/Exty.] Footnotes: (1)
The Securities and Exchange Board of India (Mutual Funds)
Regulations, 1996, the Principal Regulations were published in the Gazette of
India on December 9, 1996 vide S.O. No. 856(E). (2)
The Securities and Exchange Board of India (Mutual Funds)
Regulations, 1996 were subsequently amended – (a)
on (b)
on (c)
on (d)
on (e)
on (f)
on (g)
on (h)
on (i)
on (j)
on (k)
on (l)
on (m)
on (n)
on (o)
on (p)
on (q)
on (r)
on (s)
on (t)
on (u)
on (v)
on (w)
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