The Securities and Exchange Board of India (SEBI) has drafted a proposal to fast track the launch of mutual fund products. Till now, the asset management company (AMC) had to go through a long process of filing the offer document (OD) and waiting for a go-ahead from SEBI. But now SEBI has specified a standard OD to curb this entire procedure.
AMCs would now only have to directly file the final OD. No longer would they need to submit a draft OD, with an additional due diligence certificate from the compliance committee and other basic requirements. Once SEBI confirms the receipt of the standard OD to the AMC (in writing), they would be free to launch the scheme.
This will go a long way in speeding up the whole process of approval for mutual fund schemes. To begin with, this process would be adopted for Fixed Maturity Plans (FMPs) and close-ended income schemes. The reason being that they constitute the bulk of new ODs that are filed with SEBI. Also, the asset allocations are standard and most of the AMCs have existing schemes.
The standard OD would require elaborate instructions on the intended disclosures. According to SEBI, these disclosures would help prospective investors make an informed decision.
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