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

Timeline for the Exit Option Window Period for Change in Control of Asset Management Companies (AMCs)

11-Aug-2023 | SEBI/HO/IMD/IMD-PoD-2/P/CIR/2023/142

Securities and Exchange Board of India (SEBI) has issued a Circular outlining the Exit Option Window Timeline for Change in Control of Asset Management Companies (AMCs), effective from August 11, 2023.

By virtue of the Circular, a modification has been introduced to para 17.8.1 (III) of SEBI Master Circular no. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2023/74 dated May 19, 2023. A change in the control of the AMC, whether direct or indirect, is now only permissible if unitholders are given an option to exit at the prevailing Net Asset Value (NAV) without any exit load. This option must remain open for a minimum of 15 calendar days from the date of communication. In cases of change in control leading to scheme consolidation or merger, the unitholders must have the opportunity to exit at the prevailing NAV without any exit load for a minimum of 30 calendar days from the date of communication. Prior to this amendment, the exit option was available for a minimum of 30 calendar days from the communication date.

All AMCs are directed to implement these changes within one month from the issuance date of this circular.

It is important to note that para 17.8.1 of the SEBI Master Circular, titled Master Circular for Mutual Funds, pertains to the Procedure for Change in Control of AMC. All other provisions mentioned in the aforementioned master circular related to the respective para will remain unchanged.

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