SEBI issues guidelines for closed ended schemes (mutual funds) to be launched on or after December 12, 2008.

SEBI vide its Circular SEBI/IMD/CIR No. 12/147132/08 dated December 11, 2008 has reviewed provisions related to closed ended and has come out with certain guidelines to be followed by closed ended schemes (except Equity Linked Savings Schemes) to be launched on or after December 12, 2008. The details are as follows:

1. SEBI made it mandatory for all units to be listed. This will provide an exist route for unit holders since SEBI had last week banned early exit in Close Ended Scheme.
2. SEBI clarified that listing fees shall be a permissible expense to be charged under Regulation 52(4).
3. Trustees shall ensure that before launch of the scheme the in-principle approval for listing has been obtained from the stock exchange(s) and appropriate disclosures are made in the Scheme Information Document.
4. SEBI clarified that NAV should be computed and published on daily basis. This will definitely provide an indication of the value of underlying assets and will help in price discovery, as the units are traded on stock exchange.
This circular comes on the heels of the decisions taken by SEBI board on December 4, 2008 (these decisions were discussed here).
SEBI has also stated that the concerned regulations would be amended later.