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Market regulator SEBI has allowed mutual funds to invest unclaimed redemption and dividends in overnight scheme, liquid and money market schemes specifically floated by this purpose, provided that the unclaimed money is from that particular scheme.
Earlier, unclaimed money was deployed only in overnight funds under debt schemes category.
Making the amendment through a circular, SEBI on Friday said the unclaimed funds will be deployed only in those overnight, liquid and money market funds which are placed in relatively low risk category.
AMCs will not be permitted to charge any exit load in this plan and total expense ratio of such plan will be capped as per the direct plan of such scheme or at 50 basis points whichever is lower, it said.
This will come into force from December 1, SEBI added.
Market regulator has also directed to offer instance access facility only in overnight and liquid schemes with immediate effect.
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