Here is the list of latest guidelines issued by the Sebi on its website:
1. It has been decided that in respect of the purchase of units of mutual fund schemes (except liquid and overnight schemes), closing NAV of the day shall be applicable on which the funds are available for utilization irrespective of the size and time of receipt of such application. The existing provision on NAV applicability for liquid and overnight funds and cut-off timings for all schemes shall remain unchanged.
2. It has been decided that AMC shall put in place a written-down policy which inter-alia detail the specific activities, role and responsibilities of various teams engaged in fund management, dealing, compliance, risk management, back-office, etc., with regard to order placement, execution of an order, trade allocation amongst various schemes and other related matters.
3. AMCs shall use an automated Order Management System (hereinafter referred to as ‘OMS’), wherein the orders for equity and equity-related instruments of each scheme shall be placed by the fund manager(s) of the respective schemes. In case a fund manager is managing multiple schemes, the fund manager shall necessarily place scheme wise order.
4. Orders by the dealer can be placed either for each scheme individually or pooled on the basis of orders from multiple schemes. The trade allocation policy of the AMCs shall inter-alia detail (i) specific situations (not generic) wherein the orders by dealers shall be placed for each scheme individually or pooled from multiple schemes, (ii) the timeline to be considered for pooling of orders in case of multiple schemes.
5. In the case of pooled orders, post allocation of trades shall be on a pro-rata basis as per the size of the order placed. The said allocation shall be based on a weighted average price. The policy shall clearly include scenarios/situations (e.g. redemption pressure) in which deviation from the allotment of units on a pro-rata basis would be permissible, if at all.
6. In case of scenarios, wherein, the mutual funds are required to place certain margins/collaterals in order to execute certain transactions, the policy shall include details on how such margins/collaterals shall be segregated/placed from amongst various schemes, without affecting the interest of investors of any scheme.
7. Audit trail of activities related to order placement, trade execution and allocation shall be available in the system. Further, there should be time stamping with respect to the order placed by the fund manager, order placed by dealer, order execution and trade allocation.
The above-mentioned circular will come into effect from January 01, 2021.