Market watchdog the Securities and Exchange Board of India (Sebi) has asked mutual funds to reduce the period between the opening and closing of issues from the present 30-45 days to 15 days to ensure that investors' money is not blocked for longer period.
"In order to make NFO (New Fund Offers) process efficient, it has been decided to reduce the NFO period to 15 days," the Sebi said in a circular.
However, equity-linked saving scheme (ELSS) are exempted from the norms.
SMC Capital Equity Head Jagannadham Thunuguntla said the move will help investors, as their money would not be blocked for longer period.
However, noted mutual fund expert Dhirendra Kumar said the change will not have much implications for the market, since mutual funds get most subscription during last days of its closing.
The market regulator also asked mutual funds to extend a facility to their schemes called ASBA, which allows investors to release their money only when they are alloted securities.
"It has been decided to extend ASBA facility to the investors subscribing to New Fund Offers (NFOs) of mutual fund schemes," the regulator said.
