SEBI on Wednesday restored the validity period of "observation letter" issued by the markets regulator for launching new fund offerings (NFOs) by mutual funds to six months.
This will come into force with immediate effect, the Securities and Exchange Board of India (SEBI) said in a circular.
The regulator, in March 2020, had extended the validity period of observation letter issued by it for the launch of NFOs from six months to one year from the date of SEBI letter.
In SEBI parlance, issuance of observations letter implies its go-ahead for the NFO.
"Based on consultation with stakeholders, it has been decided to restore the validity period of observation letter issued by SEBI to six months to launch NFOs,” the regulator said.
However, for all schemes where SEBI has already issued observation letter and NFOs are yet to be launched, the schemes will be launched within one year from the date of regulator’s observation letter, it added.
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