The market regulator Securities and Exchange Board of India has issued a circular[1] regarding the timelines related to the processing of schemes related applications filed by Asset Management companies (AMC) to all mutual funds, asset management companies (AMCs), trustee companies, board of trustees of mutual funds and association of mutual funds in India (AMFI) on July 23, 2021. 

Securities and Exchange Board of India, to bring uniformity in the timeline of processing of scheme related to the application filed by asset management companies and to promote ease of doing business, has decided that in case no modifications are suggested or no queries are raised by Securities and Exchange Board of India within 21 working days then the application filed by asset management companies for the certain matters may be deemed to be taken on record. 

The following matters are rollover of close-ended schemes, mergers or consideration of scheme, change in fundamental attributes of the scheme, and conversion of a close-ended scheme to an open-ended scheme. 

It is further stated by the market regulator that in case no modifications are suggested or no queries are raised within 21 working days then no objection will be deemed to be communicated in respect of applications filed by Asset Management Companies (AMC) as per Regulation 24 (b) of Securities and Exchange Board of India (Mutual Funds) regulation, 1996. 

To provide that the application is complete in all respects and the application is in compliance with all the relevant circulars and regulations issued by the Securities and Exchange Board of India, the timelines mentioned above should be strictly followed. However, there is an exception mentioned by the regulator, When the subject matter of approval presence a unique situation that requires wider consultation and deliberation or requires a policy view to be taken done the timeline might not be complied with. 

It is stated in the circular that it shall be applicable for all applications received on or after 01/09/2021. Section 11 subsection 1 of the Securities and Exchange Board of India act, 1992 and is to be read with regulation 77 of the Securities and Exchanges Board of India (Mutual Funds) Regulations, 1996 which allows the bard to remove any difficulties in applications and interpretation of issued regulations, confers the power to regulators to issue a circular to protect the interests of investors in securities, promote development, and regulate the securities market.

  [1] SEBI CIRCULAR, SEBI/HO/IMD/IMD-II DOF3/P/CIR/2021/603 https://www.sebi.gov.in/legal/circulars/jul-2021/circular-on-timelines-related-to-processing-of-scheme-related-applications-filed-by-amcs_51326.html

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