SEBI proposes 30-day deadline for mutual funds to use new fund offer proceeds

The proposal is aimed at helping asset management companies retain their first-mover advantage in a highly competitive market.

India’s market regulator has proposed that asset management companies use funds collected through new fund offers (NFO) within 30 days from the date of allotment. The Securities and Exchange Board of India released a consultation paper in this regard on Wednesday.

Currently, AMCs have no deadline to deploy the funds collected through NFOs, or new mutual fund schemes. According to the new proposal, AMCs should deploy NFO proceeds within 30 days, but in case that’s not possible, the timeline could be extended to another 30 days if the investment committee approves. 

It is also proposed that AMCs specify the timelines …