SEBI clarifies that grandfathering of identified NCDs is applicable across the mutual fund industry

May 04, 2020 | by Avantis RegTech Legal Research Team

Industry Specific Compliance

The Securities Exchange Board of India (SEBI) on April 28, 2020 has clarified that the grandfathering of the identified Non-Convertible Debentures (NCDs) is applicable across the mutual fund industry. SEBI had allowed the unlisted NCDs to grandfather till maturity vide its circular SEBI/HO/IMD/DF2/CIR/P/2019/104 dated October 01, 2019 referred as “identified NCDs”.

The mutual funds transact such identified NCDs and criteria under “Investment in Listed and Unrated Debt Instruments” is not applicable.

Further, the investments that will take place in such identified NCD’s, shall be made on the previous laws relating to proper due diligence and all the restrictions on investment shall be applicable.

The timeline for compliance with maximum limit has been further extended with highest investment numbers as 15% and 10% of the debt portfolio of the scheme to September 30, 2020 and December 31, 2020. 

[SEBI Circular No. SEBI/HO/IMD/DF2/CIR/P/2020/75]


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