Capital markets regulator Sebi on Friday came out with a new timeline for the exit option window period given to the mutual fund unitholders for change in control of asset management company(AMC).
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Under the new timeline, a change in control of the AMC cannot be made unless the unitholders of the mutual fund would be given the option to exit on the prevailing Net Asset Value (NAV) without any exit load within a period of at least 15 calendar days from the date of communication. Earlier, this timeline was at least 30 days.
However, in case of change in control resulting in consolidation or merger of schemes, the unitholders would be given the option to exit on the prevailing NAV without any exit load within a time period not less than 30 calendar days from the date of communication, Sebi said in a circular.
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Considering that growth in technological communication has enabled faster dissemination of information to unitholders, a request was received by Sebi from the mutual fund industry to review the timeline for the exit option window.
Among other requirements for change in control of a mutual fund are prior approval of the trustees and Sebi, a written communication about the proposed change to each unitholder and an advertisement in the newspaper about the proposed changes.
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