SEBI has asked MFs to disclose the actual exercise of proxy votes in annual and extraordinary general meetings of investee companies in terms of changes in capital structure, stock option plans, social and corporate responsibility issues, appointment and removal of directors, merger/corporate restructuring and anti-takeover provisions.

To make the NFO process more efficient, Sebi has reduced the timeline from 45 days for close-ended schemes and 30 days for open-ended schemes to 15 days. However, ELSS (equity-linked savings) schemes will continue to follow the government of India guidelines. Fund houses will have to allot units, refund money and dispatch statements of accounts within five business days from the closure of their NFOs.

Sebi has also barred fund houses from entering into any revenue-sharing arrangement with offshore funds as this leads to a conflict of interest. Any commission/brokerage received from the underlying fund will have to be credited into the account of the scheme concerned. Sebi observed that AMCs were entering into revenue-sharing arrangements with offshore funds in respect of investments made on behalf of Fund of Funds' schemes. It clarified that MFs could not collect additional management fees for any of the schemes. Fund houses have also been asked to stop paying dividends from the unit premium reserve. On brokerage and commission paid to associates, Sebi has said that fund houses should disclose the brokerage/commission paid to associates, employees or relatives.