Revised Regulatory Mechanism for Collective Investment Scheme   

PUBLISHED ON: 01-06-2022

SEBI has amended the SEBI (Collective Investment Scheme) Regulations, 1999 and made the following key changes to the regulatory framework for Collective Investment Schemes:

  • In order to avoid conflict of interest, certain persons have been restricted to, directly or indirectly: (i) hold 10% or more of the shareholding in any other Collective Investment Management Company (“CIMC”) or the trustee company of any other CIMC; or (ii) have representation on the board of any other CIMC or the trustee company of any other CIMC.
  • Such persons include a CIMC, promoters of CIMC, associates or group companies of any CIMC or promoters thereof and a shareholder holding 10% or more of the shareholding in any CIMC or trustee company of any CIMC.
  • Collective Investment Schemes are now required to comply with the following conditions after the closure of the subscription list, which was not provided for prior to the amendment:
    • Minimum subscription amount of Rs. 20 crore;
    • Minimum 20 investors; and
    • No person shall hold more than 25% of the assets under management of scheme.

The aforementioned amendments were notified by SEBI vide a notification dated May 10, 2022 (available here).