The capital markets regulator said the change in rule is based on the suggestions from an expert committee on valuation of securities with multiple put options, wherein the put option is factored into valuation of the security by the valuation agency.
Sebi said if the put option is not exercised by a mutual fund, while exercising the option would have been in favour of the scheme, a justification for not exercising the put option should be provided. Sebi said. The new rule would be effective from October, 2021.
Fund houses would have to provide it to the valuation agencies, board of the asset management company and trustees on or before the last date of the notice period. “The valuation agencies shall not take into account the remaining put options for the purpose of valuation of the security,” Sebi said in a circular on Friday.