SEBI issued Circular on Listing of M.F. schemes that are in the process of winding up



May 20, 2020

All Mutual Funds (MFs) /
Asset Management Companies (AMCs)/
Trustee Companies/ Boards of Trustees of Mutual Funds
All Recognized Stock Exchanges

Subject: Listing of Mutual Fund schemes that are in the process of winding up

  1. Presently, in terms Regulation 32 of SEBI (Mutual Funds) Regulations, 1996 (MF Regulations), and SEBI Circular no. SEBI/HO/IMD/DF2/CIR/P/2018/160 dated December 28, 2018, every close-ended scheme and units of the segregated portfolio shall be listed on recognized stock exchanges.
  2. As per MF Regulations, there are several steps envisaged with respect to winding up of Mutual Fund schemes before the scheme ceases to exist. During this process, such units can be listed and traded on a recognized stock exchange, which may provide an exit to investors.
    In terms of Regulation 31B(1) of the MF Regulations, the units of Mutual Fund schemes can be listed in the recognized stock exchange. Accordingly, the units of Mutual Fund schemes which are in the process of winding up in terms of Regulation 39(2)(a) of MF Regulations, shall be listed on a recognized stock exchange, subject to compliance with listing formalities as stipulated by the stock exchange.
    However, pursuant to the listing, trading on stock exchange mechanism will not be mandatory for investors, rather, if they so desire, may avail an optional channel to exit provided to them.
  3. Initially, trading in units of such a listed scheme that is under the process of winding up shall be in dematerialized form.
  4. AMCs shall enable the transfer of such units which are held in the form of Statement of Account (SoA) / unit certificates.
  5. Detailed operational modalities for trading and settlement of units of MF schemes that are under the process of winding up, shall be finalized by the stock exchanges where units of such schemes are being listed, in consultation with SEBI. The operational modalities shall include the following:
    • a. The mechanism for order placement, execution, payment, and settlement;
    • b. Enabling bulk orders to be placed for trading in units;
    • c. Issue related to the suspension of trading, declaration of date for determining the eligibility of unitholders, etc. in respect of payments to be made by the AMC as part of the winding-up process;
    • d. Disclosures to be made by AMCs including disclosure of NAV on a daily basis and scheme portfolio periodically etc.
  6. The stock exchange shall develop a mechanism along with RTA for trading and settlement of such units held in the form of SoA/ Unit Certificate.
  7. The AMC, its sponsor, employees of AMC and Trustee shall not be permitted to transact (buy or sell) in the units of such schemes that are under the process of being wound up. The compliance of the same shall be monitored both by the Board of AMC and Trustee.
  8. This Circular shall come into force with immediate effect. Stock exchanges desirous of offering this facility shall submit the detailed operational modalities to SEBI, within 7 days from date of issuance of this Circular.
  9. This Circular is issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, read with the provisions of Regulation 77 of SEBI (Mutual Funds) Regulations, 1996, to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
ALSO READ:  Provision on the post-default curing period for CRAs is being revised by SEBI

Yours faithfully,

Prasenjit Dey
Deputy General Manager
Tel. no.: 022-26449314

Hii, want to get publish your article at, then submit your article here or send a mail to
Author: admin

BharaTax is an online Blog portal for reporting all the latest articles, judgments, Circulars, orders, and notifications relating to Taxation Laws in India. Our Blog will also provide Latest Information related to Income Tax, GST, Ministry of Corporate Affairs (MCA), ICAI, VAT, CST, Etc…

Share on:

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.


Subscribe to our mailing list for Latest updates to your email inbox.

Thank you for subscribing. In case after Subscription, you have not received mail, then please check your Spam Folder.

Something went wrong.