Winding up of schemes only after majority unitholders' nod: Sebi

In a move aimed to further safeguard the interest of mutual fund investors, Sebi has made it mandatory for trustees of mutual funds to obtain the consent of unitholders when majority of trustees decide to wind up a scheme.

 

Under the new norms, mutual fund trustees will be required to obtain the consent of the unitholders when the majority of the trustees decide to wind up a scheme or prematurely redeem the units of a close-ended scheme.

 

The trustees will have to obtain consent of unitholders by simple majority of the unitholders present and voting on the basis of one vote per unit held and publish the results of voting within 45 days of the publication of notice of circumstances leading to winding up, Sebi said in a notification issued on Tuesday.

 

In case the trustees fail to obtain the consent, Sebi said the scheme would be open for business activities from the second business day after publication of results of voting.