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Bar News Acts League

The SEBI (Mutual Funds) Regulations, 1996

Act ID: 1996

The SEBI (Mutual Funds) Regulations, 1996

"Regulations governing the establishment and management of mutual funds in India."

Table of Contents

106 Sections

Ch. IIR

egistration of Mutual Fund

S.7AThe provisions of the Securities and Exchange Board of India (Criteria for Fit and Proper Person) Regulations, 2004 shall, as far as may be, apply to all applicants or the mutual funds under these regulations.']]S.7B[ Norms for Shareholding and Governance in Mutual Funds. [Inserted by Notification No. SEBI/LAD-NRO/GN/2018/02, dated 13.3.2018.]S.12Payment of service fee

Ch. IIICo

nstitution and Management of Mutual Fund and Operation of Trustees, Etc.

S.15Contents of trust deed S.17Approval of the Board for appointment of trustee S.18Rights and obligations of the trustees

Ch. IVCo

nstitution and Management of Asset Management Company and Custodian

S.19Application by an asset management company S.20Appointment of an asset management company S.23Procedure where approval is not granted S.24[ Restrictions on business activities of the asset management company. [Substituted by Notification F. No. LAD-NRO/GN/2011-12/22/27668, dated 30.8.2011.]S.25Asset management company and its obligations S.26Appointment of custodian S.27Agreement with custodian

Ch. VS

chemes of Mutual Fund

S.28Procedure for launching of schemes S.29Disclosures in the offer document S.29A[ Nomination. [Inserted by S.O. 625 (E), dated 11.6.2002]S.30Advertisement material S.31Misleading statements S.32[ Listing of close ended schemes. [Substituted Notification No. LAD-NRO/GN/2009-10/01/159601, dated 8.4.2009.]S.33Repurchase of close ended schemes S.34Offering period S.35Allotment of units and refunds of moneys S.36[ Statement of accounts or unit certificates. [Substituted Notification No. LAD-NRO/GN/2009-10/01/159601, dated 8.4.2009.]S.37Transfer of units S.38Guaranteed returns S.39Winding up S.40Effect of winding up S.41Procedure and manner of winding up S.42Winding up of the scheme S.42A[ Delisting of units. [Inserted Notification No. LAD-NRO/GN/2009-10/01/159601, dated 8.4.2009.]

Ch. VIIn

vestment Objectives and Valuation Policies

S.43Investment objective S.44Investment, borrowing, restriction, etc S.45Option Trading, etc S.46Underwriting of securities S.47[ Valuation of investments. [Substituted by Notification No. LAD-NRO/GN/2011-12/38/4290, dated 21.2.2012.]S.48Computation of Net Asset Value S.49Pricing of Units S.49ADefinitions S.49BApplicability S.49CAdditional eligibility criteria S.49DOther conditions for real estate mutual fund schemes S.49EPermissible investments S.49FValuation of real estates assets and declaration of net asset value S.49GDuties of asset management company S.49HUsage of real estate assets of a real estate mutual fund scheme S.49IDuties of trustees S.49JDisclosures in offer document and other disclosures S.49KTransactions by employees etc S.49LFor the Purposes of this Chapter, unless the context otherwise requires S.49MApplicability S.49NEligibility criteria for launching infrastructure debt fund scheme S.49OConditions for infrastructure debt fund schemes S.49PPermissible Investments S.49QValuation of assets and declaration of net asset value S.49RDuties of asset management company S.49SDisclosures in offer document and other disclosures S.49TTransactions by employees etc

Ch. VIIG

eneral Obligations

S.50To maintain proper books of account and records, etc S.51Financial year S.52Limitation on fees and expenses on issue of schemes S.53Despatch of warrants and proceeds S.54Annual Report S.55Auditor's report S.56[Providing copies of Annual Report and summary thereof. [Substituted by Notification No. SEBI/LAD-NRO/GN/2018/14, dated 29.5.2018.]S.57Annual Report to be forwarded to the Board S.58Periodic and continual disclosures S.59Half-yearly disclosures S.59A[ Statement of Portfolio. [Inserted by S.D. 235(E), dated 14.3.2000]S.60Disclosures to the investors

Ch. VIIIIn

spection and Audit

S.61Board's right to inspect and investigate S.62Notice before inspection and investigation S.63Obligations on inspection and investigation S.64Submission of report to the Board S.65Communications of findings, etc S.66Appointment of auditor S.67Payment of inspection fees to the Board

Ch. IXP

rocedure for Action in Case of Default

S.68Liability for action in case of default S.69Cancellation of certificate S.70Manner of making order of cancellation or suspension S.71Manner of holding enquiry before suspension or cancellation S.72Show cause notice and order S.73Effect of suspension or cancellation of certificate of registration S.74Publication of order of suspension or cancellation S.75Action against intermediaries S.75A[ Action against mutual fund and/or asset management company. [Inserted by Notification No. LAD-NRO/GN/2011-12/38/4290, dated 21.2.2012.]S.76Adjudication, etc

Ch. XMis

cellaneous

S.1Liabilities Side Of The Balance Sheet S.1A[ A mutual fund scheme shall not invest in unlisted debt instruments including commercial papers, except Government Securities and other money market instruments:S.2Accounting Policies. - (a) For investments in securities.- Following accounting policies shall be followed by Mutual Funds for the preparation of accounts :S.3Contents of Balance Sheet.S.3A[ Value of Gold:- [Inserted by Notification No. SEB/LAD/DOP/82534/2006, dated 20.12.2006] (1) the gold held by a gold exchange traded fund scheme shall be valued at the AM fixing price of London Bullion Market Association (LBMA) in US dollars per troy ounce for gold having a fineness of 995.0 parts per thousand, subject to the following:S.4Contents of Revenue Account.S.5Auditor's Report.S.6Other changes S.7[ Thinly traded securities as defined in the guidelines shall be valued in the manner as specified in the guidelines issued by the Board.] [Inserted by S.O. 69(E), dated 23.1.2001]S.8Management of the asset management company Board of the company with names of the Directors, experience, qualification and profession S.9[ No mutual fund scheme shall make any investment in,S.10The asset management company shall not make any exaggerated statement, whether oral or written, either about their qualifications or capability to render investment management services or their achievements.] [Inserted by S.O. 1223(E), dated 8.12.1999]S.11A real estate mutual fund scheme determines whether an exchange transaction has commercial substance by considering the extent to which its future cash flows are expected to change as a result of the transaction S.13[ A mutual fund may invest in the REIT and InvITs subject to the following:S.14A gain or loss arising from a change in the fair value of the real estate asset shall be recognised in the Revenue Account for the period in which it arises. The gain that arises from the appreciation in the value of real estate asset is an unrealised gain and thus the same cannot be distributed S.16An application for registration of mutual fund shall be accompanied by a copy each of S.21The consideration receivable on disposal of a real estate asset is to be recognised initially at fair value. In particular, if payment for a real estate asset is deferred, the consideration received is recognized initially at the cash price equivalent. The difference between the nominal amount of the consideration and the cash price equivalent should be recognised as interest revenue over the period of credit S.22The trust deed shall state that the minimum number of trustees shall be four S.77Power of the Board to issue clarifications S.78Repeal and saving