The Securities and Exchange Board of India vide Circular dated October 01, 2019 has allowed the existing unlisted NCDs to be grandfathered till maturity. SEBI vide its circular dated 28th April 2020 has clarified that the grandfathering of the identified non-convertible debentures (NCDs) is applicable across the mutual fund industry and said the mutual funds can transact in such NCDs. However, investments in such NCDs will continue to be subject to compliance with investment due diligence and all other applicable investment restriction.
SEBI has extended the timeline by six months for mutual funds to comply with the maximum limits of investment in unlisted non-convertible debentures (NCDs). Mutual funds were earlier required to comply with the maximum investment limit of 15 % and 10 % in unlisted NCDs by March 31 and June 30, respectively.
Based on the requests received, SEBI has extended the timeline by 6 months for compliance with the highest investment limit of 15% in unlisted NCDs by September 30, 2020 and 10% by December 31, 2020.
Click here to read the Circular.
