The Hindu Business Line : Fast track mechanism proposed for mutual funds

According to this, mutual fund houses are required to file only the final offer document with SEBI instead of the draft offer document as is being done now.

The regulator has specified a standard offer document giving elaborate instructions on the disclosures in the offer document.

Offer Document

After the SEBI confirms to the Asset Management Company in writing that the offer document has been received by it, the AMC is free to launch the scheme. The SEBI, however, retains the power to advise amendments to the offer document in the interest of the investors.

To begin with, the proposal states that the fast track model will be adopted for FMPs (fixed maturity plans) and close-ended income schemes. The proposed process aims to compress without compromising on the quality of disclosures to investors.

The existing procedure pertaining to disclosing the draft document for comments for 21 working days, receiving communication from SEBI and launching the scheme within six months is done away with in the proposed process.

The final offer document will be posted on the SEBI Web site, accompanied by due diligence certificate from the trustees and additional due diligence certificate from the compliance head and fund manager.

Public comments

“It is a step in the right direction as this process will help time the market, as it shortens the duration for launching a scheme,” said Mr Jaideep Bhattacharya, Chief Marketing Officer, UTI Mutual Fund.

The market regulator has invited public comments till January 15, on its fast tract mechanism.

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