Sebi to fix time for MF investors to exit
Mumbai: The Securities and Exchange Board of India (Sebi) is contemplating fixing of a minimum time limit for mutual fund investors to exercise an exit option, Mr. Jayanth R Varma, a full-time board member has disclosed.

Presently, Sebi Mutual Fund Regulations 1996 do not provide for any minimum time period for which such an offer must be kept open. Any change in fundamental attributes of a mutual fund scheme can be carried out by the fund, if the trustees approve it and all unit holders are allowed to exit the scheme at net asset value.

This however, could mean that a MF could even have only a 24-hour window for dissenting unit-holders to exit and has actually left open a loophole for unscrupulous players to abuse. Several investors have in the past complained that mutual funds have mailed them a letter informing them of the proposed changes and the exit option leaving them no choice but to exercise their one day only to exercise that choice.
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