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Sebi Tightens Mutual Fund Launch Rules
18 Aug
Summary
- New single application form for mutual fund registration.
- Sponsors must disclose ownership, financial stability, and governance.
- Eligibility criteria include experience and profitability norms.
The Securities and Exchange Board of India (Sebi) has introduced a revised, single application form for mutual fund registration, aiming to bolster transparency and strengthen the industry's foundation. This updated process requires prospective fund sponsors to provide extensive disclosures concerning their ownership, ultimate beneficial owners, financial strength, and governance practices.
Previously a two-stage process, the registration now consolidates information into one form while retaining the in-principle approval and final registration stages. Sponsors must submit detailed shareholding patterns, identify beneficial owners, and declare their capital contribution to the asset management company (AMC).
Furthermore, applicants must present audited financial statements for the past five years and a certified net worth certificate. Eligibility criteria include a minimum of five years of financial services experience, consistent profitability, and a positive net worth over the last five years. Alternatively, the AMC must possess a net worth of at least ₹150 crore, to be infused by the sponsor.
