Mutual fund houses will now have to implement the facility on or after October 1
MARKET regulator Sebi on Wednesday extended the deadline for mutual fund houses to implement the Asba facility for new fund offers (NFOs) to October 1.
Under Asba (application supported by blocked amount) deposits of applicants remain in their accounts till the shares are alloted.
It has been decided that mutual fund AMCs shall provide Asba facility to investors for all new fund offers launched on or after October 1, 2010, the Securities and Exchange Board of India (Sebi) said.
Earlier in March Sebi had made it compulsory for MFs to extend Asba facility for all new fund offers from July 1.
At present, Asba is in place for all participants in the Indian capital market.
The move would help investors save interest cost on borrowing and help companies get rid of the hassles associated with refunds.
However, some experts feel that the said move will not have much implication for the market, since mutual funds get most subscription in last days of its closing.
Sebi said the move would protect the interest of investors in securities and promote the development and better regulation of the securities market.
