SEBI Reduces Exit Option Timeline From 30 to 15 Days Granted to Unitholders in Case of a Change in Control of AMCs

Circular No. SEBI/HO/IMD/IMD-PoD-2/P/CIR/2023/142, Dated: 11.08.2023

Earlier, SEBI prescribed the procedure for a change in control of an Asset Management Companies (AMC). Considering that growth in technological communication has enabled faster dissemination of information to unitholders, a request has been received from the industry to review the timeline for the exit option window period for change in the control of AMC.

Accordingly, SEBI has now reduced the exit option window period from 30 days to 15 calendar days, granted to unitholders in case of a change in control of the AMC. As per the revised timeline, a change in control of the AMCs cannot be made unless the unitholders of the mutual fund are given the option to exit on the prevailing Net Asset Value (NAV) without any exit load within 15 days from the date of communication.

However, in case of a change in control resulting in consolidation or merger of schemes, the unitholders are given the option to exit on the prevailing Net Asset Value without any exit load within 30 days from the date of communication.

Further, SEBI has advised all AMCs to make necessary changes to facilitate the implementation of the same before September 11, 2023.

SEBI’s decision to reduce the exit option window for unitholders from 30 to 15 days, aims to align with faster information dissemination. This change ensures investors can exit at the prevailing NAV without load, promoting transparency and swift decision-making.

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