Regulations
MFs to discontinue multiple-plan schemes from today

As per SEBI's guidelines, the single plan structure would apply to all new schemes with effect from today while existing schemes with multiple plans (based on investment amount) can accept fresh subscriptions only under one plan

New Delhi: Mutual funds will stop accepting fresh investments in over 100 schemes with SIP (Systematic Investment Plan) option, as market regulator Securities and Exchange Board of India (SEBI) has asked fund houses to move to “one plan, one scheme” structure, reports PTI.

 

As per SEBI’s guidelines, the single plan structure would apply to all new schemes with effect from today, while existing schemes with multiple plans (based on investment amount) can accept fresh subscriptions only under one plan.

 

Other plans will continue till the existing investors remain invested in the plan.

 

SIPs provide the mutual fund investors option to put in as low as Rs100 per month and have become quite popular in recent years.

 

While the fund houses would continue to offer SIP options in their schemes, they can not launch multiple investment plans for one single scheme. The move is part of reform measures taken by SEBI, coming into effect today, to simplify the mutual fund investments and re-energise the sector.

 

As a result, the National Stock Exchange (NSE) said in a circular that a total of 126 schemes would be discontinued for subscription/SIP registration (fresh as well as existing SIP) based on the intimation received from AMCs (Asset Management Companies), with regards to SEBI guidelines on Single plan structure for mutual fund schemes.

 

Separately, BSE listed out 84 mutual fund schemes where subscription/SIP registration (for existing SIP) is being discontinued from today.

 

These schemes are available for trading on mutual fund platform of the two bourses.

 

The BSE also listed out the schemes where minimum purchase amount and additional purchase amount have been lowered.

 

The decision was taken by SEBI to do away with the present practice of cluttering one scheme with numerous plans.

 

Among other reforms measures coming into effect today, the fund houses will have to make more disclosures in the interest of investors.

 

At the same time, fund houses will be able to charge their investors a little bit more as incentive for expanding to small cities, but would also have to set aside a small portion of their assets for investor education and awareness.

 

In another benefit for small investors, cash investments of up to Rs20,000 per investor, per mutual fund would be allowed every financial year without PAN, but repayment in form of redemptions, dividend or any other form would be paid only through a banking channel.

 

The debt funds would also have to ensure that they are not over-exposed to a particular sector.

 

These changes in mutual fund regulations were approved by SEBI’s board in its last meeting on 16 August 2012 and were notified last month.

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COMMENTS

Nem Chandra Singhal

5 years ago

Please provide more details with live examples as the system perhaps is changing.
Nem Chandra Singhal

SFIO report on Reebok India affairs likely by November

Reebok India, in May, had filed an FIR, alleging that its former MD Subhinder Singh Prem and CEO Vishnu Bhagat were involved in a Rs870-crore fraud by indulging in “criminal conspiracy” and “fraudulent practices” over a period of time

 
New Delhi: The Serious Fraud Investigation Office (SFIO), probing the alleged irregularities at Reebok India, is likely to submit its report by November as the sports wear maker is still finalising its accounts, reports PTI.
 
SFIO, under the corporate affairs ministry, is looking at the alleged Rs870-crore financial scam at the company over a period of time.
 
A senior corporate affairs ministry official said, “The SFIO is likely to submit its report on Reebok India by November since the company is in the process of finalising its accounts”.
 
The ministry had ordered a probe into the affairs of Reebok India on 29th May following media reports.
 
Reebok India, in May, had filed an FIR, alleging that its former managing director Subhinder Singh Prem and chief operating officer Vishnu Bhagat were involved in a Rs870-crore fraud by indulging in “criminal conspiracy” and “fraudulent practices” over a period of time.
 
The Income Tax Department is also probing the alleged financial irregularities at Reebok India.
 
Systemic management in business planning and running of the company were reportedly done by some officials at the company, according to agencies probing the issue.
 
Earlier, the company’s German parent Adidas had said global sales of its Reebok brand declined by 26% in the April-June quarter, mainly due to impact from Reebok India.
 
As per the group, it expected to take a hit of 70 million euro (about Rs490 crore) in its global operating profit in 2012 on account of ‘irregularities’ at Reebok India.
 

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SEBI imposes Rs12 lakh fine on two for synchronised trade in Era Construction

Both Ghelani and Rathod executed synchronised trades in the scrip of Era Construction and indulged in creation of artificial volume in 2004

 
Mumbai: Market regulator Securities and Exchange Board of India (SEBI) has imposed a total penalty of Rs12 lakh on two entities for alleged fraudulent trading in the shares of erstwhile Era Constructions, reports PTI.
 
"...impose a penalty of Rs 2 lakh on Vijay Rathod...impose a penalty of Rs 10 lakh on Tejash Ghelani," Securities and Exchange Board of India (SEBI) said in two separate orders.
 
It further said that monetary penalties were imposed "... for the violation of the provisions of regulations... of SEBI (prohibition of fraudulent and unfair trade practices relating to securities market)  Regulations, 2003," the regulator said today.
 
Probe carried out by SEBI observed a spurt in price and volume in the scrip of Era Constructions (India) Ltd during the period from 17 March 2004 to 12 November 2004.
 
Subsequently, the company has changed its name to Era Infra Engineering Ltd in 2008.
 
"...noticee (Ghelani and Rathod) had executed synchronised trades in the scrip of Era and indulged in creation of artificial volume during the investigation period," SEBI said in its orders.
 
SEBI noted that Ghelani carried out synchronised trades for a volume of 4.67 lakh shares with a total value of Rs2.92 crore, while Rathod was indulged in synchronised trades for a 1.03 lakh scrips with a valuation of Rs66.25 lakh.
 
The regulator said the two entities had carried out numerous trades in Era Constructions' scrip on a daily basis for several trading days and the traded quantities were also high.
 
The fact that such transactions took place repeatedly over a period of time reinstates the non-genuine nature of such trades.
 

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