Regulatory body Securities and Exchange Board of India (Sebi) on Tuesday decided to mandate trustees of mutual funds to obtain the consent of unit holders when the majority of trustees decide to wind up a scheme.
As part of amending mutual fund regulations, the watchdog will make it mandatory for funds to follow Indian Accounting Standards (Ind AS) from 2023-24.
Mutual fund trustees will be required to obtain the consent of the unit holders when the majority of the trustees decide to wind up a scheme or prematurely redeem the units of a close-ended scheme, Sebi said.
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“The trustees will have to obtain consent of the unit holders by simple majority of the unit holders present and voting on the basis of one vote per unit held and publish the results of voting within 45 days of the publication of notice of circumstances leading to winding up,” it said.
In case the trustees fail to obtain consent, Sebi said the scheme should be open for business activities from the second business day after publication of results of voting.
The decision to amend the regulations was taken at the Sebi board meeting on Tuesday.
Apart from the Ind AS requirements, Sebi has decided to amend the norms with respect to accounting-related regulatory provisions to remove redundant provisions and to bring more clarity.
Meanwhile, to enhance the role of KYC Registration Agencies, the regulator has decided to make them responsible to carry out independent validation of the KYC records uploaded onto their system by the registered intermediary (RI).
Besides, such agencies will have to maintain an audit trail of the upload/modification/download with respect to KYC records of clients.
“It has also been prescribed that the systems of the RIs and KRAs should be integrated to facilitate seamless movement of KYC documents to and from RIs to KRAs,” the release said.