Regulator eases AMC employee interest alignment rules 

New Delhi

Markets regulator Sebi has decided to introduce timelines for deploying funds raised through New Fund Offers (NFOs) by asset management companies (AMCs) and relaxed regulatory framework regarding the alignment of AMC employees' interests with those of unitholders.

Additionally, Sebi has mandated disclosure of stress testing for all mutual fund schemes to provide greater transparency to investors. These proposals, approved by Sebi's board on Wednesday, aimed at enhancing operational flexibility for mutual funds while ensuring greater accountability and trust among investors.

Regarding deployment timelines, Sebi said that fund managers must deploy funds collected during an NFO as per specified asset allocation of the scheme, typically within 30 days. If funds are not deployed in specified timeline, investors will have the option to exit the scheme without paying an exit load. The framework discourages AMCs from collecting excess funds during NFOs, as investors can invest in open-ended schemes later at the prevailing Net Asset Value (NAV).

Sebi defers ESG disclosure deadline

Markets regulator Sebi has decided to defer the ESG disclosure deadline for value chain partners of listed companies by one year until FY26, giving more time to them to comply with the Business Responsibility and Sustainability Reporting (BRSR) requirements.

Until then, environmental, social and governance (ESG) reporting will remain voluntary instead of the current "comply-and-explain" approach. 

The proposal was approved by Sebi's board on Wednesday.