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Securities and Exchange Board of India
CIRCULAR
SEBI/HO/IMD/IMD-I DOF2/P/CIR/2022/161 November 25, 2022
To
All Mutual Funds/
All Asset Management Companies (AMCs)/
All Trustee Companies/ Boards of Trustees of Mutual Funds/
All Registrar and Transfer Agents (RTAs)/
Association of Mutual Funds in India (AMFI)
Dear Sir/ Madam,
Subject: Timelines for transfer of dividend and redemption proceeds to unitholders
1. SEBI has amended Regulation 53 of SEBI (Mutual Funds) Regulations, 1996 vide
Gazette Notification No. SEBI/LAD-NRO/GN/2022/106 dated November 15, 2022.
2. Consequent to the above amendment, the following has been decided:
I. Transfer of Dividend Payments
a. In partial modification of paragraph II(c) of SEBI Circular SEBI/IMD/CIR
No.1/64057/06 dated April 4, 2006, the record date shall be two working
days from the issue of public notice, wherever applicable, for the purpose of
payment of dividend.
b. The payment of dividend to the unitholders shall be made within seven
working days from the record date.
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Securities and Exchange Board of India
II. Transfer of Redemption or Repurchase Proceeds
a. The transfer of redemption or repurchase proceeds to the unitholders shall
be made within three working days from the date of redemption or
repurchase.
b. Vide SEBI Circular SEBI/IMD/CIR No.7/104753/07 dated September 26,
2007, a list of permissible investments was prescribed for the purpose of
overseas investments. For schemes investing atleast 80% of total assets in
such permissible overseas investments, the transfer of redemption or
repurchase proceeds to the unitholders shall be made within five working
days from the date of redemption or repurchase.
c. AMFI, in consultation with SEBI, shall publish a list of exceptional
circumstances for schemes unable to transfer redemption or repurchase
proceeds to investors within time as stipulated at II (a) and II (b) above, along
with applicable time frame for transfer of redemption or repurchase proceeds
to the unitholders in such exceptional circumstances. The list shall be
published within 30 days of issuance of this circular.
III. Interest for the period of delay in transfer of redemption or repurchase or
dividend shall be payable to unitholders at the rate of 15% per annum along with
the proceeds of redemption or repurchase or dividend, as the case may be.
Such Interest shall be borne by AMCs. The details of such payments shall be
sent to SEBI as part of Compliance Test Reports in the format placed at
Annexure A. Investors shall also be informed about the rate and amount of
interest paid to them. Accordingly, circular SEBI/MFD/CIR/2/266/2000 dated
May 19, 2000 is rescinded.
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Securities and Exchange Board of India
3. This circular is issued in exercise of the powers conferred under Section 11 (1) of
the Securities and Exchange Board of India Act 1992, read with the provision of
Regulation 77 of SEBI (Mutual Funds) Regulation, 1996 to protect the interests of
investors in securities and to promote the development of, and to regulate the
securities market.
Yours faithfully,
Chhavi M Kapoor
General Manager
Tel no.: 022-26449112
Email: chhavim@sebi.gov.in
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Securities and Exchange Board of India
Annexure – A
A. Statement of Interest Paid to the investors for delays in transfer dividend
payments
PAN/
Date of Amount of
Investor PEKRN Period of
Record Date transfer of Interest
Name of delay
Dividend Paid
Investor
B. Statement of Interest Paid to the investors for delays in transfer of
redemption or repurchase proceeds
PAN/ Date of
Date of
PEKRN receipt of Amount of
Investor transfer of Period of
of Redemption/ Interest
Name Redemption/ delay
Investor Repurchase Paid
Repurchase
request
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