**Summary:**
This Securities and Exchange Board of India (SEBI) circular, reference number SEBIHOIMDIMDII/DOF3/CIR/2021/698, dated December 22, 2021, addresses the validity period of observation letters pertaining to Mutual Funds' New Fund Offers (NFOs). The circular restores the original validity period of SEBI's observation letters for launching NFOs to six months from the date of the SEBI letter, as previously specified in circular SEBI/IMD/CIR No.5/12609/608 dated May 23, 2008. This reverses the temporary extension to one year granted via circular SEBI/HO/IMD/DF3/CIR/P/2020/62 dated March 23, 2020.
However, schemes for which SEBI has already issued observation letters but have not yet launched NFOs will retain the one-year validity period from the date of the original SEBI observation letter. The circular takes effect immediately and is issued under the authority of Section 11(1) of the Securities and Exchange Board of India Act, 1992, and Regulation 77 of SEBI (Mutual Funds) Regulations, 1996, to safeguard investor interests and regulate the securities market.
For further information, contact Bithin Mahanta, General Manager, at 022-26449634 or via email at bithin.m@sebi.gov.in.
Key Entities Referenced
Securities and Exchange Board of India: Regulatory body for securities market in India, also known as SEBI.
Mutual Funds: Investment vehicles subject to regulations by SEBI.
Asset Management Companies: Companies that manage mutual funds, also known as AMCs.
Association of Mutual Funds in India: Industry association of mutual funds in India, also known as AMFI.
New Fund Offers: Initial offerings of new schemes by mutual funds, also known as NFOs.
Securities and Exchange Board of India Act 1992: The act of parliament that established SEBI and defines its powers.
SEBI Mutual Funds Regulation, 1996: Regulations governing mutual funds as defined by SEBI.
Bithin Mahanta: General Manager at SEBI, signatory of the circular.
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Securities and Exchange Board of India
CIRCULAR
SEBI/HO/IMD/IMD-II DOF3/P/CIR/2021/698 December 22, 2021
All Mutual Funds/
Asset Management Companies (AMCs)/
Trustee Companies/Boards of Trustees of Mutual Funds/
Association of Mutual Funds in India (AMFI)
Sir/ Madam,
Subject: Restoration of relaxed timelines w.r.t. validity of observation letter pertaining
to Mutual Funds
1. SEBI, vide circular SEBI/HO/IMD/DF3/CIR/P/2 dated March 23, 2020, extended the
validity period of observation letter issued by SEBI for launch of all New Fund Offers
(NFOs) from six months to one year from the date of SEBI letter.
2. Based on consultation with stakeholders, it has been decided to restore the validity
period of observation letter issued by SEBI to six months to launch NFOs as specified
in SEBI circular SEBI/IMD/CIR No.5/126096/08 dated May 23, 2008.
3. However, for all schemes (NFOs) where SEBI has already issued observation letter
and NFOs are yet to be launched, the schemes shall be launched within one year from
the date of SEBI observation letter.
4. This circular shall come into force with immediate effect.
5. 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 the provision of Regulation
77 of SEBI (Mutual Funds) Regulation, 1996 to protect the interests of investors in
securities and to promote the development of, and to regulate the securities market.
Yours faithfully,
Bithin Mahanta
General Manager
Tel no.: 022-26449634
Email: bithinm@sebi.gov.in
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