SEBI notifies the Securities and Exchange Board of India (Mutual Funds) Regulations, 2026
SEBI notifies the Securities and Exchange Board of India (Mutual Funds) Regulations, 2026. These regulations shall come into force with effect from April 1, 2026
The Regulation provide for Registration of a Mutual Fund and its eligibility criteria for the purpose of granting a certificate of registration. The eligibility criteria’s have been bifurcated In the instant appeal, the assessee had challenged the order of CIT(A) in confirming Route 1and Route 2 based on experience, profitability net worth and liquid net worth etc.
The Regulation also provide for norms for shareholding by sponsor of a mutual fund, its associate or group company including the asset management company and governance in mutual funds. It also provide rules for disassociation of sponsor from asset management company and the mutual fund.
As per Regulations, a mutual fund shall be constituted in the form of a trust and the instrument of trust shall be in the form of a deed, duly registered under the provisions of the Registration Act, 1908, executed by the sponsor in favour of the trustee named in such an instrument. In the event the sponsor disassociates from a mutual fund, the signatory to the trust deed in place of the disassociated sponsor shall be as specified by the Board.
The Regulations also provide rules for appointment of board of directors of the trustee company and rights and obligations of the trustee
The Regulations provide for appointment of a custodian for the mutual fund by the Trustees who shall enter into a custodian agreement and send intimation to the Board within fifteen calendar days of such appointment. The trustees shall maintain oversight of the activities of the custodian in relation to the mutual fund. The Custodian appointed shall carry out the custodial services for the schemes of the fund for safekeeping of assets of the scheme.
The Regulation also provide for eligibility criteria for asset management company i.e., its track record and reputation, director and key personnel qualifications, net worth requirements etc.
An asset management company may launch a scheme: (i) after approval of the trustees; and (ii) on receipt of Board’s final observations on the offer document filed with the Board.
The Regulations also provide for allowable investments in which the asset management company shall invest funds of a mutual fund scheme, investment restrictions, borrowing and lending by Mutual Funds
An asset management company, mutual fund, trustee or sponsor which contravenes any of the provisions of the Act, rules or regulations framed thereunder or circulars and guidelines issued shall be liable for action under the applicable provisions of the Act, rules, regulations, or circular framed thereunder including but not limited to suspension or cancellation of registration of an intermediary holding a certificate of registration, stopping subscription to existing schemes or suspension of launch of any new scheme of a mutual fund and forfeiture of the amount invested by an asset management company in any of its schemes.
Download SEBI (Mutual Funds) Regulations 2026 Click Here >>
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