The Securities and Exchange Board of India (Sebi), on August 11, 2023, reduced the time to 15 days for unitholders to exit from a mutual fund scheme at the prevailing Net Asset Value (NAV) without any exit load when there is a change in the Asset Management Company (AMC).
According to new Sebi guidelines, the unitholders must redeem their investments within 15 days from the date of the communication.
However, in cases where a change leads to the consolidation or merger of schemes, unitholders can avail of this option within 30 days of the communication.
According to its previous directive, MF investors can redeem their investments within 30 days from the date of communication if there is a change in AMC. This window has now been reduced to 15 days. Sebi has directed all AMCs to follow the guidelines within a month.
The release said the decision had been taken recognising the advancements in communication technology, which has expedited the dissemination of information to unitholders.
As per Sebi’s other guidelines, AMCs must obtain prior approval from the trustees and the board if there is a change related to the AMC. A written communication detailing the proposed change must also be sent to each unitholder.
