(1)

Any investment to be made under regulation 43 shall be invested subject to the investment restriction specified in the Seventh Schedule :

[Provided that nothing in the Seventh Schedule [, save clause 14 therein] [Inserted by G.S.R. 38(E), dated 12.1.2006] shall apply to a gold exchange traded fund scheme.]

(1A)

[ The mutual fund having an aggregate of securities which are worth Rs. 10 crores or more, as on the latest balance-sheet date, shall subject to such instructions as may be issued from time to time by the Board settle their transactions entered on or after January 15, 1998, only through dematerialised securities.] [Inserted by S.O. 32(E), dated 12.1.1998]

(2)

The mutual fund shall not borrow except to meet temporary liquidity needs of the mutual funds for the purpose of repurchase, redemption of units or payment of interest or dividend to the unitholders:

Provided that the mutual fund shall not borrow more than 20 per cent of the net asset of the scheme and the duration of such a borrowing shall not exceed a period of six months.

(3)

[ Save as otherwise expressly provided under these regulations, the mutual fund shall not advance any loans for any purpose.] [Substituted by F. No. LAD-NRO/GN/2011-12/22/27668, dated 30.8.2011.]

(4)

[ A mutual fund may lend and borrow securities in accordance with the framework relating to short selling and securities lending and borrowing specified by the Board.] [Inserted by S.O. 32(E), dated 12.1.1998]

(5)

[ A gold exchange traded fund scheme shall be subject to the following investment restrictions :

(a) [* * *]

(b) the funds of any such scheme shall be invested only in gold or gold related instruments in accordance with its investment objective, except to the extent necessary to meet the liquidity requirements for honouring repurchases or redemptions, as disclosed in the offer document; and

(c) pending deployment of funds in accordance with clause (b), the mutual fund may invest such funds in short-term deposits of scheduled commercial banks.]