SEBI (Mutual Funds) (Second Amendment) Regulations, 2020

SECURITIES AND EXCHANGE BOARD OF INDIA

NOTIFICATION

Mumbai, the 29th October, 2020

SECURITIES AND EXCHANGE BOARD OF INDIA (MUTUAL FUNDS)

(SECOND AMENDMENT) REGULATIONS, 2020

No. SEBI/LAD-NRO/GN/2020/39.—In exercise of the powers conferred by section 30 read with clause (c) of sub-section (2) of section 11 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, 2020.

2. They shall come into force on the date of their publication in the Official Gazette.

3. In the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996,–

I. In sub-regulation (22) of Regulation 18, after the words “specified in” and before the words “the Fifth Schedule”, the words and symbol “PART-A of” shall be inserted.

II. Third Proviso to clause (b) of regulation 24 shall be substituted with the following, namely–

“Provided further that an asset management company may become a proprietary trading member for carrying out trades in the debt segment of the recognised stock exchanges, on behalf of its mutual fund schemes and may also become a self-clearing member of the recognised clearing corporations to clear and settle trades in the debt segment on behalf of its mutual fund schemes.”

III. In Regulation 25,

i. In sub-regulation (6A), the words “whatever his designation may be” shall be substituted with the words “whatever be the designation”.

ii. sub-regulation (6A) shall be numbered as clause (a) thereof and after clause (a) so numbered, the following clause shall be inserted, namely–

“(b) Chief Executive Officer (whatever be the designation) shall also ensure that the Asset Management Company has adequate systems in place to ensure that the Code of Conduct for Fund Managers and Dealers specified in PART – B of the Fifth Schedule of these regulations are adhered to in letter and spirit. Any breach of the said Code of Conduct shall be brought to the attention of the Board of Directors of the Asset Management Company and Trustees.”

iii. In sub-regulation (6B), the words “whatever the designation may be” shall be substituted with the words “whatever be the designation”.

iv. sub-regulation (6B) shall be numbered as clause (a) thereof and after clause (a) so numbered, the following clause shall be inserted, namely–

“(b) The Fund Managers (whatever be the designation) shall abide by the Code of Conduct for Fund Managers and Dealers specified in PART – B of the Fifth Schedule of Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and submit a quarterly self-certification to the Trustees that they have complied with the said code of conduct or list exceptions, if any.

Explanation:- For the purposes of this sub-regulation, the phrase “Fund Managers” shall include Chief Investment Officer (whatever be the designation).”