Sebi issues rules for PE backed MFs
₹5,000 crore. However, Sebi added that the MF sponsored by the private equity fund would not participate as an anchor investor in the public issue of an investee company, where any of the schemes and funds managed by the sponsor PE has an investment of 10% or more or a board representation.
“In order to enhance the penetration of the Mutual Fund industry, and to facilitate new types of players to act as sponsors of Mutual Funds, an alternative set of eligibility criteria is introduced. This is with the objective of facilitating fresh flow of capital into the industry, fostering innovation, encouraging competition, providing ease of consolidation and easing exit for existing sponsors," Sebi said in the circular.
Sebi also added that self-sponsored AMCs can continue the mutual fund business subject to them fulfilling certain eligibility criteria. This would provide the original sponsor flexibility to voluntarily disassociate itself from the MF without needing to bring a new sponsor.
An AMC can become a self-sponsored AMC provided it has been carrying business in financial services for at least five years and has positive net worth for last five years and net profit of ₹10 crore in each of the immediately preceding five years. Also, any sponsor proposing to disassociate should have been a sponsor of the concerned mutual fund for at least five years and the shareholding proposed to be reduced by a sponsor should not be under any encumbrance or lock-in.
. Read more on livemint.com
