SEBI relaxes compliance requirement pertaining to Mutual Funds, REITs and InvITs

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SEBI, vide its circular dated 23 March 2020 (SEBI/HO/IMD/DF3/CIR/P/2020/47) has provided for the following relaxations in compliance requirement with respect to mutual funds.

A.  Relaxations specified in SEBI (Mutual Funds) Regulations, 1996 and circulars issued thereunder:

1.  All schemes (NFO) which are yet to be launched but where observation letter was issued by SEBI shall remain valid for a period of 1 year from the date of such SEBI letter.

2.   All new schemes (NFO) where final observation letter is yet to be issued shall remain valid for a period of 1 year from the date of the SEBI letter.

3.   Timelines for disclosures have also been relaxed, as follows:
Particulars of disclosure/ Regulation/ Circular
Frequency
Original Due Date
Extended Date
Half yearly disclosures of unaudited financial results as required under Regulation 59 of SEBI (Mutual Funds) Regulations, 1996
Half yearly

1 month from the close of the half year, i.e, 31 March 2020.
30 April 2020
31 May 2020
Disclosure of commission paid to distributors as required under Point 2(a) of SEBI circular No. SEBI/HO/IMD/DF2/CIR/P/2016/42 dated 18 March 2016
Half yearly

Within 10 days from the half year end i.e. 31 March 2020
10 April 2020
10 May 2020
Yearly disclosure of investor complaints with respect to Mutual Funds as required under Point 4 (b) of SEBI circular No. Cir/IMD/DF/2/2010 dated 13 May 2010
Yearly

Within 2 months of the close of the financial year i.e. 31 March 2020
31 May 2020
30 June 2020

B.     Extension in the date of implementation for certain policy initiatives:
Circular
Particulars
Original Due Date
Extended Date
Risk management framework for liquid and overnight funds and norms governing investment in short term deposits dated 20 September 2019
Liquid funds shall hold at least 20% of its net assets in liquid assets
1 April 2020
1 May 2020
Review of investment norms for mutual funds for investment in Debt and Money Market Instruments dated 1 October 2019
Existing open ended mutual fund schemes shall comply with the revised limits for sector exposure
1 April 2020
1 May 2020
Review of investment norms for mutual funds for investment in Debt and Money Market Instruments dated 1 October 2019
Maximum investment in unlisted NCDs as % of the debt portfolio of the scheme.
15% - 31 March 2020
15% - 30 April 2020
Valuation of money market and debt securities dated 24 September 2019
Amortization based valuation shall be 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.
1 April 2020
1 May 2020

Further, SEBI issued a circular on 23 March 2020 (SEBI/HO/DDHS/CIR/P/2020/42), extending the due date for regulatory filings and compliances for REITs and InvITs for the period ending 31 March 2020 by 1 month, over and above the timelines prescribed under the SEBI  (Infrastructure Investment  Trusts)  Regulations,  2014 and  SEBI  (Real  Estate Investment  Trusts)  Regulations,  2014 and related circulars.


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