Three important mutual fund rules will be effective from Jan 1 2021

Three important mutual fund rules will be effective from Jan 1 2021

👉New Risk-o-Meter

👉Uniformity of NAV (orders >2lk will get NAV when funds reach AMC)

👉New safeguards wrt Inter Scheme Transfers

Key Highlights: Risk-o-Meter

-New category of 'very high' risk added

-Duration funds to have credit criteria

-Credit funds to have duration criteria

-All schemes to have newly introduced liquidity criteria

-MFs to disclose no of times the risk level has changed over the yr

Key Highlights: Uniform NAV

- Orders below Rs 2 lk (except overnight & liquid) will get NAV on the day that money reaches the AMCs, NOT on the day investor places the order

- this is already in place for orders above 2 lk

Key Highlights: IST

- Close Ended Schemes: IST purchases allowed only within 3 biz days of allotment of NFO 

-Open Ended Schemes: IST allowed for meeting redemption-led liquidity requirement

- IST for liquidity mgmt only after other option exhausted