MFs to deploy NFO funds within 30 days of allotment from April 1: How will this benefit AMCs?
Live MintMarkets regulator Sebi on Thursday made it mandatory for asset management companies to deploy money collected from investors through new fund offers within 30 days from the date of allotment of units. The measure, to be implemented from April 1, 2025, is aimed at encouraging AMCs to collect only as much funds in NFOs as can be deployed in a reasonable period of time and to discourage any mis-selling of NFOs of the mutual fund schemes In a circular, Sebi asked AMCs to specify achievable timelines in the Scheme Information Document of a mutual fund scheme regarding the deployment of the funds as per the specified asset allocation of the scheme and garner funds during the NFO accordingly. "The AMC shall deploy the funds garnered in an NFO within 30 business days from the date of allotment of units," it added. Sebi said that Trustees will be responsible for monitoring the deployment of funds collected in NFO and taking steps to ensure that the funds are deployed within a reasonable timeframe.
History of this topic
Sebi directs mutual funds to deploy NFO fund within 30 days of allotment
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