Under the facility, the money invested will be held in the investor’s bank account and released only after the units are allotted
The Securities and Exchange Board of India (Sebi) has extended the application supported by amount (Asba) facility to mutual fund investors. Investors subscribing to new fund offers (NFOs) of mutual fund schemes can now apply to these schemes without paying subscription money upfront.
Under the facility, the money invested will be held in the investor’s bank account and released only after the units are allotted.
The market regulator also shortened the subscription period for NFOs to 15 days from the current 30 days for so-called open-end funds, and 45 days for close-end funds. The new rule will apply to all new schemes launched after 1 July.
Sebi also provided for more disclosures on commissions paid to associates and related entities of asset management companies. It also imposed restrictions on dividend declarations, and banned commissions from underlying funds while running fund of funds.
Source: http://www.livemint.com/2010/03/15225323/Sebi-extends-Asba-to-MFs-clam.html
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