CMAs prepare to launch new mutual fund programs from July as Sebi ban nears end

After a temporary pause, asset management firms are preparing to launch new mutual fund programs from next month amid financial markets regulator Sebi’s three-month ban on introducing new offerings fund is coming to an end.

Additionally, Asset Management Companies (AMCs) have a range of passive fixed income and equity funds as well as selective launches in certain categories to fill product gaps.

The Securities and Exchange Board of India (Sebi) had halted the launch of NFOs until the new systems regarding pool accounts are determined and the regulator has set July 1 as the deadline for the implementation of the new system.

So far this month, at least six AMCs – including PGIM India Mutual Fund (MF), Sundaram MF, Baroda BNP Paribas MF, LIC MF and Franklin India MF – have filed offer documents with Sebi to obtain its approval to launch new programs.

Apart from these, draft documents were submitted to the regulator for 15 schemes between April and May by a dozen fund companies.

“It looks like the NFO launch season is going to be back from next quarter. For two quarters, AMCs bandwidth has been consumed to make the relevant changes in customer money movement as Sebi their was ordering to stop using pool accounts. In addition, at the same time, the markets also became very volatile,” said Swapnil Bhaskar, Head of Strategy, Niyo – Neo-Banking Platform for Millennials .

Going forward, some AMCs will start launching new fund offerings (NFOs) as new processes are in place and they see value in the market due to the correction, he added. .

Kaustubh Belapurkar, Director – Manager Research, Morningstar Investment Adviser India, said that given the temporary pause in new fund launches over the past few months, asset managers will look to launch these funds when the scenario returns to normal. .

“Asset managers have a range of liabilities on both the fixed income and equity side as well as selective launches in certain categories to fill product gaps,” he added.

The pooling of investors’ funds and units by securities dealers and clearing members in any manner and by investment advisers or mutual fund distributors (wherever it takes place) for Mutual fund trading was to be halted from April 1.

However, after mutual discussion and agreement, Sebi has granted the mutual fund industry extended deadlines until July 1 to allow the industry to bring a high level of operational efficiency for the benefit of investors. and efficient operation of mutual fund subscriptions and redemptions.

According to Sandeep Bagla, CEO of Trust MF, most intermediaries have redesigned their processes to address Sebi’s concerns over pool accounts. Mutual funds are eager to launch NFOs in July.

NFOs lead to good investor participation and also increased distributor activity.

“The retail industry and other service providers/platforms are in the process of complying with regulatory requirements and we hope to gain approval for the launch of NFOs in the next quarter,” said Prateek Pant, chief commercial officer of White Oak Capital Asset Management.

He further stated that WhiteOak Capital AMC is looking forward to the launch of its first equity NFO – the WhiteOak Capital Flexicap fund – and that over the next 6 months it plans to launch other equity products in different categories such as Midcap, Largecap and Tax Saver.

The Sebi dictate has impacted the launch of new programs as the current 2022-23 fiscal year has seen the introduction of just four NFOs which garnered a total of 3,307 crore, with ICICI Prudential Housing Opportunities Fund taking the lion’s share of 3,159 crore.

In 2021-2022, CMAs launched 176 New Fund Offerings (NFOs) garnering a huge 1.08 lakh crore. In comparison, 84 NFOs were launched in 2020-21 and cumulatively these funds were able to mobilize 42,038 crore. PTI SP BAL BAL

This story was published from a news feed with no text edits. Only the title has been changed.

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Dolores W. Simon