Sebi: Sebi’s New Proposals for Changes in Mutual Fund Regulations

Sebi: Sebi's new proposals for changes in mutual fund regulations

Sebi: Sebi's new proposals for changes in mutual fund regulations
Sebi: Sebi's new proposals for changes in mutual fund regulations

Sebi: People are turning towards investments and savings in line with the improving standard of living. The number of people investing in stock market and mutual funds is increasing every year. But as a part of safeguarding investors’ investments.. SEBI is introducing many rules and regulations from time to time. It also revises the past.

To increase accountability

SEBI has tightened its belt to protect the interests of unit holders investing in mutual funds. In this regard, it is proposed to increase the accountability of trustees, Board of Asset Management Company. A joint platform should also be introduced to take public announcements more to the attention of investors.
Unit Holder Protection Committee

SEBI has asked AMCs to have an independent review mechanism on all products and services keeping in mind the interest of investors. To this end, it has suggested setting up a Unit Holder Protection Committee (UHPC).

It said that the trustees of mutual funds and its employees should focus on not engaging in market abuse and illegal sales for increasing the asset base. AMC is responsible for the fees and expenses charged. It is said to ensure that the sponsor does not get any undue advantage.
Expansion of industry size

Sebi has suggested that trustees be responsible for periodically reviewing the steps taken by AMCs on investor bank details, KYCs along with core activities.
As the MF industry has expanded 5 times in size over the last decade, there is a need to make some changes. Assets under management (AUM) has increased from Rs 7.93 lakh crore in November 2012 to Rs 39.89 lakh crore by December 2022, it said.

In the latest amendment, SEBI said that the AMC board will be responsible for ensuring that all activities of the asset management company are in compliance with these norms. It has given time till February 24 to receive public feedback.


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