- In its circular, SEBI has given 30 days’ time to all fund management companies to rectify the same.
- On failing to do so, they are required to give written justification to the Investment Committee (IC) which can extend the timeline up to 60days.
- On failing to meet the above timeline the fund management company will be barred from launching any new scheme till the time the portfolio is rebalanced. Further, it will not be allowed to levy exit load, if any, on the investors exiting such schemes.
SEBI Tightens Rules for Passive Breaches by Fund Management Companies
Published on March 31, 2022
Current Context: Passive breach happens when scheme asset allocation deviates from that mentioned in this scheme information document (SID) unknowingly.
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