Sebi proposes allowing investment advisers, analysts to use liquid MFs for deposit requirements

Markets watchdog Sebi connected Friday projected allowing concern advisers and probe analysts to usage liquid communal money units, with a lien marked successful favour of the regulatory body, to conscionable their deposit requirements. This would beryllium successful summation to the enactment to support the deposit with the bank.

Under the Sebi rules, concern advisers (IAs) and probe analysts (RAs) are required to support a deposit with a bank, which is marked arsenic a lien successful favour of the applicable supervisory body.

The compliance with the deposit request is 1 of the conditions for the registration arsenic IA oregon RA. This request needs to beryllium fulfilled connected a continuous ground to support the registration successful force.

Currently, they are required to comply with this request by June 30, 2025.

However, Sebi has received representations from IAs and RAs, whereby they highlighted astir facing applicable issues astir opening fixed deposit accounts and a lien marking the aforesaid successful favour of the Administration and Supervisory Body.

They cited difficulties specified arsenic inconsistent procedures crossed slope branches, delays successful issuing required documents, disorder astir Sebi's lien marking rules and constricted consciousness among slope staff.

Accordingly, successful its consultation paper, Sebi has "proposed to judge lien marked liquid communal money units arsenic deposit for compliance with the deposit request nether IA Regulations and RA Regulation. Lien connected specified units of communal money shall beryllium marked for astatine slightest 1 year".

Sebi noted that liquid communal funds are mostly low-risk and casual to person to cash.

It suggested that these communal money units tin beryllium held successful Statement of Account (SOA) oregon demat form. The worth of these communal funds, aft deducting exit load and a specified haircut, volition beryllium counted toward the deposit.

The worth should beryllium reviewed annually. If it falls beneath the required threshold oregon if much deposit is needed owed to much clients, the IA oregon RA should apical it up by adding more.

The Securities and Exchange Board of India (Sebi) has sought nationalist comments till May 29 connected the proposal.