Sebi directs MFs to deploy NFO funds within 30 days of allotment

Market regulator Sebi has asked mutual funds to deploy the money raised through new fund offers (NFOs) within 30 days of allotment.

Currently, there is no timeline prescribed by the regulator for the deployment of NFO proceeds.

The move is aimed at ensuring that investors' money is not lying idle for a long period of time.

Sebi said in a circular on Monday that the money raised through NFOs should be deployed within 30 days of the allotment of units to investors.

If the fund house is not able to deploy the money within 30 days, it will have to return the money to the investors with interest.

The regulator said that the move is aimed at "protecting the interest of investors and to ensure that the money raised through NFOs is utilized for the intended purpose."

Sebi also said that the fund houses will have to disclose the details of the deployment of NFO proceeds in their half-yearly and annual reports.

The move is expected to bring more transparency and accountability in the NFO process.

It will also help investors to make informed decisions about investing in NFOs.