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21 Jun 2012 01:38 PM
SEBI to act tough against poor fund performance 
Team Cafemutual
 

The regulator will review the performance of a few schemes with fund managers, CEOs

SEBI Chairman UK Sinha said during the CII Mutual Fund Summit 2012 that it has found that the majority of schemes of nine AMCs have been underperforming their respective benchmarks on a continuous basis for a sustained period. He said that SEBI will start reviewing the situation with the respective fund managers and their CEOs.   

He also said that SEBI could monitor their scheme performance on a half-yearly or an annual basis. UK Sinha urged the trustees of mutual funds to take an active role in monitoring fund performance.  

Violating SEBI rules 

SEBI has also found that certain AMCs are violating SEBI rules. For instance, certain schemes have more than 25% investments from a single investor which poses a concentration risk. He also said that a few AMCs are using the inter-scheme transfer route to transfer losses of one scheme to another scheme.  

He also said that SEBI has come across certain schemes which have investments from a bank and the scheme has in turn invested in the same banks fixed deposits.  

Voting rights 

On the issue of AMC voting rights, UK Sinha said that it is the responsibility of the AMCs to take up an active role in voting in companies which they invest in. SEBI has already asked AMCs to disclose their voting policy on their websites so that investors can make an informed choice while investing in a particular fund.

 
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