**Summary:**
This circular, issued by the Securities and Exchange Board of India (SEBI) on April 30, 2020, provides further relaxation in compliance requirements for Mutual Funds and Asset Management Companies (AMCs) in light of representations received from the Association of Mutual Funds in India (AMFI). This follows an earlier circular (SEBI/HO/IMD/DF3/CIR/P/2020/47 dated March 23, 2020) that initially relaxed certain compliance requirements and extended timelines.
The key relaxations granted are as follows:
* **Extension of Implementation Dates:**
* The effective date for the risk management framework for liquid and overnight funds, requiring at least 20% of net assets to be held in liquid assets, is extended to June 30, 2020 (originally mandated in circular dated September 20, 2019).
* The deadline for existing open-ended mutual fund schemes to comply with revised sector exposure limits for investments in Debt and Money Market Instruments is extended to June 30, 2020 (originally mandated in circular dated October 1, 2019).
* The requirement for amortization-based valuation of money market and debt securities is dispensed with until June 30, 2020; valuation shall be in terms of paragraph 1.1.2.2 of the Circular dated September 24, 2019.
* **Extension of Submission Deadlines:**
* The deadline for submitting cyber security audit reports (mandated in SEBI circular dated January 10, 2019) is extended by two months to August 31, 2020.
* The deadline for filing scheme annual reports for the year 2019-20 is extended by one month to August 31, 2020.
This circular is issued under Section 11(1) of the Securities and Exchange Board of India Act, 1992, and Regulation 77 of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, to protect investor interests, promote the development of the securities market, and regulate the securities market.
For further information, contact Deena Venu Sarangadharan, Deputy General Manager, at Tel no.: 022-26449266 or Email: deenars@sebi.gov.in.
Key Entities Referenced
Securities and Exchange Board of India: Regulatory body for securities market in India.
Mutual Funds: Investment vehicles managed by Asset Management Companies.
Asset Management Companies: Companies that manage investment funds, including mutual funds.
Association of Mutual Funds in India: Industry association of mutual funds in India.
SEBI Mutual Funds Regulations, 1996: Regulations governing the operation and management of mutual funds in India.
Securities and Exchange Board of India Act, 1992: Law establishing the Securities and Exchange Board of India.
Liquid Funds: A type of mutual fund that invests primarily in liquid assets.
Cyber Security Audit: An audit to assess the security measures in place to protect against cyber threats.
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Securities and Exchange Board of India
SEBI/HO/IMD/DF3/CIR/P/2020/76 April 30, 2020
All Mutual Funds/Asset Management Companies (AMCs)/
Trustee Companies/Boards of Trustees of Mutual Funds/
Association of Mutual Funds in India (AMFI)
Sir / Madam,
Sub: Relaxation in compliance with requirements pertaining to Mutual Funds
1. SEBI vide circular no SEBI/HO/IMD/DF3/CIR/P/2020/47 dated March 23, 2020
had temporarily relaxed certain compliance requirements and extended the
timelines for compliance.
2. Further, based on the representations received from AMFI, it has been decided
to grant the following relaxations specified in SEBI (Mutual Funds) Regulations,
1996 and circulars issued thereunder:
a) The effective date of implementation of certain policy initiatives have been
extended as under:
Sr. Circular Name Particulars Extended Date
No.
1 Risk management framework for Liquid funds shall hold June 30, 2020
liquid and overnight funds and at least 20% of its net
norms governing investment in assets in liquid assets.
short term deposits dated
September 20, 2019
2 Review of investment norms for Existing open ended June 30, 2020
mutual funds for investment in mutual fund schemes
Debt and Money Market shall comply with the
Instruments dated October 1, revised limits for sector
2019 exposure.
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Securities and Exchange Board of India
Sr. Circular Name Particulars Extended Date
No.
3 Valuation of money market and Amortization based June 30, 2020
debt securities dated September valuation shall be
24, 2019 dispensed with and
irrespective of residual
maturity, all money
market and debt
securities shall be
valued in terms of
paragraph 1.1.2.2 of the
Circular
b) The timelines for submission of cyber security audit reports as mandated in
SEBI circular dated January 10, 2019 is extended by two months i.e. till
August 31, 2020.
c) The timelines for filing scheme annual reports for the year 2019-20 is
extended by one month i.e. till August 31, 2020.
3. This circular is issued in exercise of the powers conferred under Section 11 (1) of
the Securities and Exchange Board of India Act, 1992, read with Regulation 77 of
the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 to
protect the interests of investors in securities and to promote the development of,
and to regulate the securities market.
Yours faithfully,
Deena Venu Sarangadharan
Deputy General Manager
Tel no.: 022-26449266
Email: deenar@sebi.gov.in
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