SEBI changed mutual funds rules
The Securities and Exchange Board of India has made changes to the mutual fund rules.
SEBI has amended the mutual fund rules to do away with the requirement of the definition of 'associate' for sponsors.
According to the notification of SEBI, these new rules of mutual funds will be effective from September 3.
The definition of associate shall not apply to sponsors who invest in different companies on behalf of insurance policyholders.
Under the rules, an associate includes a person who directly or indirectly exercises control over an asset management company or trustee.
SEBI's board of directors in its meeting held last month has approved the proposal to change the rules.
At present, there are 43 such mutual fund companies, which manage assets worth around Rs 38 lakh crore.
With the introduction of this new rule, there has been a mixed reaction from the investors on it.
Overall, SEBI has taken a decision in the interest of investors by removing the mandatory definition of 'associate'.