The objective of the consultation paper is to seek comments and views from the public on proposals related to introducing a relaxed regulatory framework in the Mutual Funds (MF) segment, referred to as the “MF Lite Regulations,” for passively managed MF schemes. Considering the lesser risk inherent in managing these schemes, the proposed regulations as stated aims to reduce compliance requirements, foster innovation, encourage competition, and promote ease of entry for MFs interested in launching only passive schemes.
The existing regulatory framework does not differentiate between active and passive MF schemes in terms of entry barriers and compliance requirements. Therefore, a relaxed framework with light-touch regulations, termed MF Lite Regulations, is proposed for passive MF schemes.
Under the proposed framework, MFs managing only passive schemes will be covered under the MF Lite Regulations. However, MFs currently managing both active and passive schemes may opt to manage both under their existing registration. To ensure uniform applicability of proposed relaxations and provide a level playing field across all passive MF schemes, a two-way approach is adopted: ease of entry and relaxed provisions for MFs launching only passive schemes under MF Lite registration, and ease of compliance, relaxed disclosures, and other regulatory requirements for passive schemes under existing MFs as well as those launched under the MF Lite registration.
Members are requested to share their comments with Divdrisht Singh dsingh@usinfoundation.org latest by 15th July, 2024.
For any queries, you may consider connecting with Deepak at 9718426396 / djoshi@usinfoundation.org or with Divdrisht Singh at 9810695165 / dsingh@usinfoundation.org.
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