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Corporate Laws Central Ministry of Finance Securities and Exchange Board of India Act, 1992

Investment by Mutual Fund Schemes and Asset Management Companies (AMCs) in units of Corporate Debt Market Development Fund

27-Jul-2023 | SEBI/HO/IMD/PoD2/P/CIR/2023/129

SEBI has issued a circular regarding the Investment by Mutual Fund Schemes and Asset Management Companies (AMCs) in units of the Corporate Debt Market Development Fund, effective from 27th July 2023. The Highlights of the circular are: 1. Corporate Debt Market Development Fund (CDMDF) shall be launched as a close-ended scheme with an initial tenure of 15 years (extendable) from the date of its initial closing. 2. The units of CDMDF shall be subscribed by AMCs of Mutual Funds and specified debt-oriented MF Schemes and the contribution from specified debt-oriented MF schemes and AMCs, including the appreciations on the same, shall be locked in till the winding up of the Fund. 3. Such debt-oriented MF Schemes shall invest 25 bps of their Assets Under Management (AUM) in the units of CDMDF. 4. In case of delay in the contribution by Mutual Fund Schemes and AMCs, the AMCs shall be liable to pay interest at 15% per annum for the period of delay. 5. The sellers of debt securities shall be paid 90% of the consideration in cash and 10% in terms of units of CDMDF and such units paid as consideration shall bear the risk of first loss, if any to CDMDF, and can be redeemed during the tenure of the scheme, subject to certain conditions.

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