Sebi notifies rules on dividend, redemption proceeds

Sebi has notified new rules for asset management companies (AMCs) pertaining to transfer of dividend and redemption proceeds to mutual fund unit holders.

Under this, every mutual fund and asset management company would be required to transfer to the unit holders the dividend payments and the redemption or repurchase proceeds within a period specified by Sebi, the regulator said in a notification made public.

In case of failure to transfer the proceeds within the specified period, the AMC would be liable to pay interest to the unitholders for the period of such delay.

It further said that physical despatch of redemption or repurchase proceeds or dividend payments would be carried out only in exceptional circumstances and AMCs would be required to maintain records along with reasons for all such physical dispatches.

To give this effect, the Securities and Exchange Board of India (Sebi) has amended mutual funds rules and the new norms would come into force from January 15.