SEBI, vide its circular dated November 25, 2022 reduced the timelines for dividend pay-out, redemption amount pay-out to unitholders of mutual fund by Asset Management Company (AMC).
SEBI reduced the timeline for dividend pay-out will now be seven working days which at present is fifteen days and the record date will be two working days from the issue of public notice, wherever applicable, for the purpose of payment of dividend.
SEBI further reduced the timeline for redemption pay-out to three working days from the existing ten working days.
It is to be noted that for schemes investing atleast 80% of total assets in such permissible overseas investments, the transfer of redemption or repurchase proceeds to the unitholders shall be made within five working days from the date of redemption or repurchase.
AMFI, in consultation with SEBI, shall publish a list of exceptional circumstances for schemes unable to transfer redemption or repurchase proceeds to investors within time as stipulated at II (a) and II (b) above, along with applicable time frame for transfer of redemption or repurchase proceeds to the unitholders in such exceptional circumstances. The list shall be published within 30 days of issuance of this circular.
SEBI further added that interest for the period of delay in transfer of redemption or repurchase or dividend shall be payable to unitholders at the rate of 15% per annum along with the proceeds of redemption or repurchase or dividend, as the case may be. Such Interest shall be borne by AMCs. The details of such payments shall be sent to SEBI as part of Compliance Test Reports in the format placed at Annexure A.
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