Mutual fund schemes investing in exchange traded commodity derivative may hold underlying goods in physical settlement of contracts or appoint a custodian
SECURITIES AND EXCHANGE BOARD OF INDIA
NOTIFICATION
Mumbai, the 26th April,, 2019
No. SEBI/LAD-NRO/GN/2019/011.—In exercise of the powers conferred by section 30 read with clause (c) of sub-section (2) of section 11 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to further amend the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, namely –
1. These Regulations may be called the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2019.
2. They shall come into force on the date of their publication in the Official Gazette.
3. In the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, –
I. in regulation 2, –
i. after clause (mc) and before clause (mm), the following clause shall be inserted, namely, –
“(md) “goods” means the goods notified by the Central Government under clause (bc) of section 2 of the Securities Contracts (Regulation) Act, 1956 and forming the underlying
of any commodity derivative;”
ii. in clause (q), the following second proviso shall be inserted after the first proviso, namely,-
“Provided further that mutual fund schemes investing in exchange traded commodity derivatives may hold the underlying goods in case of physical settlement of such contracts.”
II. in regulation 7, in clause (g), after the word “securities” and before the word “or”, the words “or goods” shall be inserted;
III. in regulation 26, in sub-regulation (1), the following proviso shall be inserted after the second proviso, namely,-
“Provided also that mutual fund schemes investing in exchange traded commodity derivatives may appoint a custodian to have custody of the underlying goods in case of physical settlement of such contracts.”
IV. in regulation 44, in the proviso to sub-regulation (1), after the word “Schedule” and before the word “shall”, the following words, symbols and numbers shall be inserted, namely,-
“, save clause 14 therein,”
V. in regulation 52, in sub-regulation (4), in clause (b), after sub-clause (xiid) and before sub-clause (xiii), the following sub-clause shall be inserted, namely, –
“(xiie) in case of schemes investing in exchange traded commodity derivatives, recurring expenses incurred towards storage and handling abcaus.in of the underlying goods, due to physical
settlement of such contracts.”
VI. in the Seventh Schedule, after clause 13 the following clause shall be inserted, namely,-
“14. A mutual fund scheme may invest in exchange traded commodity derivatives subject to such investment restrictions as may be specified by the Board from time to time.”
AJAY TYAGI, Chairman
[ADVT-III/4/Exty./22/19]
RBI specifies ‘Related Party’ with respect to bank RBI has issued RBI Credit Risk Management Directions, 2025 defining ‘Related Party’…
Advisory on Filing Opt-In Declaration for Specified Premises, 2025 Dear Taxpayers, The relevant declarations issued vide Notification No. 05/2025 –…
FAQs for HSNS Cess Act, 2025 and HSNS Cess Rules, 2026 Q1. Who is required to get registered under the…
Refusing to condone delay can result in a meritorious matter thrown out at very threshold against case being decided on…
When prior period expenses are not admissible as deduction, following the same principle the prior period income also cannot be…
Supreme Court condoned delay of 972 days in filing appeal due to restructuring in Income Tax Department In a recent…