# Mutual Funds\: Different Information\, Familiar Responsibilities

> Dedicated regulatory framework for mutual fund scheme UPSI and asset management companies\.

## 9. Mutual funds: different information, familiar responsibilities

The dedicated mutual-fund framework took effect on **1 November 2024**. It applies to mutual-fund units, alongside the informant and general enforcement chapters.

Scheme UPSI is information not generally available that would likely materially affect **net asset value**, the value represented by the scheme’s units, or unitholders’ interests. Examples include likely accounting-policy changes, material asset revaluations, redemption restrictions, winding-up, significant liquidity changes and material defaults in underlying investments.

It also includes segregated portfolios, which separate specified assets from the main portfolio, and the triggering of swing pricing or its adjustment factor. Swing pricing adjusts transaction pricing to account for dealing costs associated with money entering or leaving a fund.

An insider is a connected person or anyone possessing or accessing scheme UPSI. The connection look-back is generally **two months**, compared with six months for company securities.

Presumed connections include immediate relatives; sponsors and specified related companies; sponsor directors and key managers; relevant personnel at registrars, custodians, valuation providers, fund accountants, auditors, advisers and intermediaries; certain exchange and self-regulatory staff; and fund or asset-management-company bankers. The presumption also covers specified entities in which an AMC or trustee director, their immediate relative or the company banker holds more than 10%. Access-related conditions matter, and presumptions can be disproved.

The **asset management company**, or **AMC**, runs the fund, while trustees provide oversight. Its board sets the legitimate-purpose policy with trustee approval. Sharing and obtaining UPSI are restricted to legitimate purposes, duties or legal obligations. Recipients become insiders, receive confidentiality notice and must sign confidentiality agreements. They cannot otherwise trade while holding UPSI.

Material information requiring communication to unitholders or public notice must be published immediately through exchanges or another SEBI-specified route, without discriminatory access.

Database duties broadly mirror the company framework: internal maintenance, no outsourcing, information details, sharer and recipient identities, timestamps and audit trails. Records remain for at least eight years after relevant transactions, and until relevant notified proceedings finish.

The trading ban focuses on possessing materially relevant scheme UPSI and presumes it motivated the trade. Connected persons must establish absence of possession; otherwise SEBI bears that burden.