SEBI today, on 20th Sept. 2019 released a circular stating that
After 30 days from today, liquid mutual funds shall levy exit load on investors who exit the Liquid Fund within 7 days of their investment.
The same shall be effective for all fresh investments from 30th day from the date of this circular. It is further clarified that the aforesaid requirement to levy exit load shall not be applicable to any investments made in liquid funds prior to 30th day from the date of this circular.
Liquid funds shall hold at least 20% of its net assets in liquid assets. For this purpose, ‘liquid assets’ shall include Cash, Government Securities, T-bills, and Repo on Government Securities.
In case, the exposure in such liquid assets falls below 20% of net assets of the scheme, the AMC shall ensure compliance with the above requirement before making any further investments.
Liquid Funds and Overnight Funds shall not park funds pending deployment in short term deposits of scheduled commercial banks.
Liquid Funds and Overnight Funds shall not invest in debt securities having structured obligations (SO rating) and/ or credit enhancements (CE rating). However, debt securities with government guarantee shall be excluded from such restriction.
The cut-off timings for applicability of Net Asset Value (NAV) in respect of the purchase of units in liquid and overnight funds shall be 1:30 p.m. instead of 2:00 p.m. Accordingly, paragraph B – 2 (a) of SEBI Circular No. Cir/IMD/DF/19/2010 dated November 26, 2010 stands modified.