Amidst the growing scale of the mutual fund industry, capital markets regulator Sebi on Friday increased the role and accountability of the Trustees in a bid to safeguard unitholders’ interest.
In addition, the regulator said that a unit holder protection committee (UHPC) by the board of an AMC would be constituted. This is part of Sebi’s attempt to have an independent review mechanism for the decisions of AMC from the perspective of the unit holders’ interest across all products and services.
The new framework would come into force from January 1, 2024, the Securities and Exchange Board of India (Sebi) said in a circular.
The regulator has specified the “core” responsibilities of the Trustees of a mutual fund, wherein they will have to ensure that the AMCs have adequate systems to prevent mis-selling to increase their assets base.
Also, Trustees need to ensure that AMC has a system to prevent market abuse by its employees and connected entities.
In addition, Trustees will be …
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