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Who has allowed private equity (PE) funds to sponsor Mutual Fund schemes on 29th March 2023?
A)
RBI
B)
SEBI
C)
IRDA
D)
NABARD

Correct Answer :   SEBI


The Securities and Exchange Board of India (SEBI) on 29th March 2023 said it has allowed private equity (PE) funds to sponsor Mutual Fund schemes, and has also permitted the set-up of self-sponsored asset management companies (AMCs).

* The decisions were taken at the SEBI board meeting on March 29, where the regulator gave its nod to key overhauls.

* "We would like more innovation in the MF industry," SEBI chairperson Madhabi Puri Buch said, while commenting on the decision to allow the PE funds to sponsor MF schemes.

* "Self-sponsored AMC will also be now allowed...Once their kids become mature, sponsors can exit without having to find a new parents for this grown-up child," Buch said, adding that this issue is a "very significant liberation in MF industry".

* In January 2023 earlier this year, SEBI had released a consultation paper that reimagined the role of the sponsor. SEBI had invited public comments on the same.

* On 29th March 2023, it finally took the decision to allow new types of sponsors in the Rs 40 trillion Indian MF industry. In the next few days, SEBI will release detailed guidelines as to how the new type of trustees would look like and what safeguards have been put in place.

* For instance, as per SEBI's concept paper in January, schemes of a PE-owned fund house must maintain the same rigors and limits when it comes to investing in companies where the sponsor PE fund holds more than a 10 percent stake. Any such company headed for an Initial Public Offering (IPO) must also be avoided by the MF schemes..

Source : Money Control

Published On : March 30, 2023
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