SEBI has extended the deadline for the implementation of the guideline for mutual funds, which specifies a minimum requirement of 20investors per mutual fund scheme or plan, and that no single investor should account for more than 25% of the corpus of a mutual fund scheme/plan.
As per media reports, SEBI has extended the deadline of its implementation to January 31 2005 from December 31, 2004. This effectively means that each Mutual Fund scheme or plan, that does not have a minimum of 20 investors or has a single investor holding more than 25% of its corpus, will either have to close down or merge with other schemes.
The Association of Mutual Funds in India (AMFI) had earlier made several representations to SEBI requesting this guideline to be implemented only at the scheme level. SEBI had said that it would take the final decision with regard to implementation only if it is convinced that the retail investors of MFs would not be affected.